Southern California hotels find filling rooms tricky
Is the local hotel industry too eager to expand?
Southern California hotels appeared to be struggling with a growing supply of empty rooms this summer. In August, for example, all five local markets tracked by CBRE Hotels had dips in occupancy rates vs. a year ago, while room rates fell in Los Angeles and Orange County compared with 2016.
Local hotel owners have added competition this year amid an industry building surge. Additionally, hotels may be paying a price for increasing room rates and making visitors rethink their lodging plans.
Year to date, all five Southern California markets had higher average room rates vs. the first eight months of 2016 but only two markets — Palm Springs and San Diego — filled a higher share of rooms in 2017.
Here’s how local markets have fared, year-to-date through August vs. 2016’s results for the same period for average room rates and occupancy, according to CBRE Hotels data …
Los Angeles: Averaged $211 a night, up $1 in a year; 84 percent full vs. 85.4 percent a year ago.
Orange County: $191 — up $5; 81.1 percent full vs. 81.9 percent.
Western Inland Empire: $118 — up $6; 78.9 percent full, flat vs. 2016.
Palm Springs: $195 — up $5; 66.6 percent full vs. 65.4 percent.
San Diego: $194 — up $7; 83.3 percent full vs. 82 percent.
A strong tourism rebound from the recession has gotten hotel developers busy.
Atlas Hospitality reported that in 2017’s first half, 10 hotels opened in Los Angeles with 2,527 rooms total; three opened in both Orange County (461 rooms) and Inland Empire (411 rooms), and two in San Diego (433 rooms.)
And Atlas says developers have filed plans in the five-county area to build 410 more hotels with 67,805 rooms — though nowhere near all will be built any year soon.
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