San Diego County Leads State in New Hotel Rooms
San Diego County led the state in hotel development last year, producing almost one-fourth of the 8,236 new rooms in California, according to a new report.
It was the second year in a row that San Diego saw the most new rooms, at 1,895, and the county will probably lead the state again in 2004, the report by Atlas Hospitality Group, a Costa Mesa hotel broker and consulting firm, said.
“San Diego is the juggernaut driving hotel development in California,” Atlas President Alan Reay said. “Occupancy and room rates make it one of the top three or four markets in the country.”
San Diego County’s room occupancy rate was 76%, with an average rate of $111 a night during the first six months of the year, the most recent statistics available, Reay said.
A factor that makes the county attractive to hotel developers and investors is a thriving convention center backed up by the pedestrian-oriented Gaslamp district and a new baseball stadium that will open next month. The county has also experienced a surge in construction on Indian land, including the 397-room Barona Valley Ranch Resort and Casino that was completed last year in Lakeside.
The largest hotel built in the state last year was the 750-room Hyatt Regency in downtown San Diego. An additional 2,151 rooms are under construction in the county.
Downtown Los Angeles, with its struggling convention center and comparative shortage of night life, “lacks the fundamentals” of San Diego, Reay said, and no hotels were built there last year.
Four hotels with a total of only 286 rooms opened in Los Angeles County, including the 77-room Ambrose Hotel in Santa Monica. An additional 678 rooms are being built in the county.
Reay predicted that hotel construction in Hollywood and the Westside of Los Angeles would pick up within the next two years as planned developments get underway.
Orange County gained six new hotels and 1,331 rooms. Among them were the 520-room Hyatt Regency Huntington Beach Resort and Spa and the 260-room Montage Resort & Spa in Laguna Beach.
An additional 521 rooms are under construction in Orange County.
Northern California, where the hotel market has suffered for the last three years, saw 3,427 rooms open last year, 30% fewer than in 2002. Santa Clara County led the market with 859 new rooms. San Francisco County opened just 616 new rooms.
The forecast for the northern part of the state is bleak. Santa Clara County has 88 rooms under construction, San Francisco has 475 rooms, Alameda County has 83 rooms and Sacramento County has 217 rooms.
“It’ll be easily four or five years before you’ll see a real uptick in new development in the Bay Area,” Reay said.
