12/29/16

The Orange County Register
By Hannah Madans

Orange County Saw 7 Hotels Open in 2016, with More on the Way in 2017

http://www.ocregister.com/articles/hotel-739777-hotels-room.html

Hotel development in the county saw another year of growth as properties opened, changed hands or underwent massive renovations.

Seven hotels opened, according to Irvine-based Atlas Hospitality Group. Of the seven, four were in the Anaheim Resort District.

Deals continued a hot streak, with 19 hotels selling for a combined $222.22 million. That’s down from $1.749 billion in deals for 27 hotels in 2015. Last year’s high number was partly a result of the Montage Laguna Beach resort being sold twice.

Big hotel deals included the 306-room Hilton Irvine/Orange County Airport hotel, which sold for $80 million, and the 224-room Crowne Plaza Costa Mesa, which went for $37.5 million.

Eleven hotels are scheduled to open next year, according to Atlas.

“There has been a huge jump in new construction of hotels in Orange County and throughout California. This is mainly due to the increase in values of existing older hotel product, which has made it more viable to look at adding new rooms for hotel owners instead of purchasing existing hotels,” Atlas President Alan Reay said. “For a number of years, hotels were selling below replacement cost so there was not a lot of incentives to build new or many lenders willing to finance such projects.”

To fill the rooms, about 47.4 million people visited Orange County in 2015, up 2.6 percent, according to a report from the California Travel and Tourism Commission. Tourists spent $9.8 billion, up 4.7 percent, and generated $894 million in state and local tax revenue. Their big expenditure? Hotels.

Here’s a breakdown of deals and new builds:

ANAHEIM

With Disneyland and the Anaheim Convention Center, the city has long been home to major hotel developments.

The most recent is the Country Inn & Suites by Carlson. The 174-room hotel sits on Disney Way, across the street from the future site of Disneyland’s Eastern Gateway Project.

It cost roughly $25 million and was built by Irvine-based R.D. Olson Construction. The hotel opened Dec. 23.

Hyatt House at Anaheim Resort, Holiday Inn Express & Suites and Residence Inn at Anaheim also opened in the city.

Hyatt House, a 262-room extended stay hotel, has a Walgreens, Starbucks and restaurants on its grounds.

In the past three years, 13 hotels have opened in the resort area, and at least eight hotels are planned, according to city records.

“We’ve seen a steady rise in the number of people visiting our destination and staying overnight, building a need for more hotel inventory,” Jay Burress, president and chief executive of Visit Anaheim, said in an email.

“As Anaheim’s infrastructure continues to develop, from the Anaheim Convention Center expansion to the development of Star Wars Land at Disneyland Resort, we believe the city is able to sustain this level of growth.”

Hotels in the works include a Cambria Hotel & Suites, which will be built by Choice Hotels International and franchise partner Santa Ana-based Nexus Cos. The hotel will have 345 rooms and open in November 2018.

This year, Anaheim agreed to reimburse an estimated $550 million dollars from bed taxes to Disney and Wincome Group to develop three four-diamond hotels in the area.

Under the agreement, 70 percent of the transient occupancy tax paid by guests will go to the companies rather than the city for two decades.

Wincome Group, through affiliate Good Hope International, is building a $208 million, 580-room hotel. It will be on the Anaheim Plaza Hotel & Suites site. Wincome Group is building a $225 million, 630-room hotel through affiliate FJS Inc. on the site of the Anabella Hotel.

Disney will build a 700-room hotel and parking structure on Disneyland Drive.

In January, Anaheim approved the development of a 12-story, 466-room JW Marriott Anaheim near GardenWalk. The project is expected to cost more than $150 million.

In 2013, Anaheim awarded a $158 million room tax subsidy to help developers Bill O’Connell and Ajesh Patel build two luxury hotels near GardenWalk.

But tax incentives for hotel developments are a thing of the past. Mayor Tom Tait and his new City Council majority have repealed a policy offering tax incentives to developers building luxury hotels.

There are now about 80 hotels in the Anaheim Resort District.

COASTAL HOTELS

It’s been a busy year for hotels along the coast as well.

The Paséa Hotel & Spa, which opened in June, sits on Pacific Coast Highway across from the iconic Huntington Beach Pier. It has 250 rooms, ocean views, a Bali-inspired spa, 11 meeting rooms, 34,000 square feet of oceanfront event space, a Tanner’s restaurant and a rooftop bar.

Pacific Hospitality Group and R.D. Olson Development of Newport Beach were the developers for the project.

The Waterfront Beach Resort, a Hilton property just across the street, finished a $140 million financing deal to add a suites-only tower.

Irvine-based Robert Mayer Corp., which owns the 290-room resort, will add a nine-story, 152-room all-suites resort tower, a restaurant, oceanview lounge, pool deck and event lawn on an adjacent 3.5-acre parcel south of the hotel.

Other coastal hotels, including the Lido House Hotel in Newport Beach, are in the works as well.

OTHER PROJECTS

Another big project to open this year was the 603-room Great Wolf Lodge in Garden Grove. The hotel, which opened in February, has an indoor water park.

In Aliso Viejo, a 129-room Homewood Suites opened.

The hotel overlooks what will be more than 400 luxury apartments built by Shea Properties.

Eleven hotels will open next year, including the 161-room Homewood Suites Irvine and the 102-room Hampton Inn & Suites Buena Park.