Orange County Business Journal
12/18/17

2018 Preview: Hospitality & Tourism
By Paul Hughes

http://www.ocbj.com/news/2017/dec/18/2018-preview-hospitality-tourism/

What have you done for me lately?

Hospitality in recent years has seen its share of hype and change, from a hot hotel market to planned fantasies and tomorrows at Orange County tourist meccas.

2018 holds the latest takes on those, from the flip side of hotel building and buying to hints of what’s coming at Disneyland Resort. Hype will become realities—if at times virtual—as promised lands from the Star Wars-themed one at Disney to the latest iterations of “technology saves the tourism world” take shape.

Stories to Watch

• Look for amped up teasing out of Star Wars: Galaxy’s Edge, an increasing intensity of material from news to marginalia on Disney’s in-development attraction—and related offerings in the far-flung empire. A virtual reality experience—Star Wars: Secrets of the Empire—is scheduled to open Jan. 5 at Downtown Disney to whet fan furor; note the naming protocol—“Star Wars: [Blank Blank]”—and that the VR deal is global; other sites are Disney World and a London mall. The Star Wars planet that Galaxy’s Edge is ostensibly on got its name in mid-November—Batuu—and next year the project will get an opening date for 2019.

n Hotel renovations are rising as surely as the tides: Markets heat up for acquisition and new owners have to spruce up the place; the sector goes big on development, and existing hotels have to “take it up to 11” to keep pace. Sometimes it’s just time. Hotels refresh at the seven-year-itch: new linens, the trends and times are passing them by … they need a change.

It’s not you. It’s them.

Hyatt Regency Orange County—in Garden Grove on Harbor near Disney—got a new general manager who has helmed two, eight- to nine-figure renovations for high-profile Hyatts in Hawaii and San Francisco; a third is expected here.

Mid-market product refresher ParkWest General Contractors in Anaheim reports an uptick in business.

And in the first finished project of 2018, a $30 million redo turns the former Fairmont into Renaissance Newport Beach on Jan. 23.

• Excluding “lifestyle” hotels, new builds and boutiques, hotels aren’t known for early adoption of coming-down-the-pike technologies. Twenty Four Seven Hotels in Newport Beach has done yeoman’s big-data work, and Irvine Marriott (see startups column, page 22) is a test lab of innovation, but a chain must wait—and wonder and worry—whether the next new new thing is gonna make it. 2018 will see a wider adoption of recent hospitality electronica—from curated content to guest- and employee-interaction systems, to food, social and fitness apps.

• With a word so overused as branding, you’d think we can’t say there’ll be a “renewed focus”—but renewed focus can only be good for a cliché, and besides it’s happening. Witness this month’s renaming of Island Hotel to Fashion Island Hotel to tie it tighter to the high-end shopping center across the street. Following Irvine Co. is a local pastime, so OC properties will look at ways of pulling together diverse elements—geography, marketing, food. In on the branding renaissance: the Renaissance (see above), which has distinct and distinctive ideas about how it wants to see and be seen in OC.

• Here’s a wild card for you to play next year: some industry watchers see a Chinese fire sale in 2018. It’d be the flippest of flipsides—a total reverse of prior years’ go-go buying spree by Middle Kingdom investors.

“The money was here, but they’re already starting to divest themselves,” said Alan Reay of broker-consultant Atlas Hospitality Group in Irvine.

He said the sale of trophy properties will increase.

In November Beijing-based former buyer Wanda Group put five global projects—including approved luxury hotels—up for sale for $5 billion. China government guidelines on overseas investment released in August put hotel-buying on the naughty list.

Local hotels owned by China-based investors include Hilton Irvine and the former Fairmont, both near John Wayne Airport, and high-end coastal resorts Ritz-Carlton and Montage, both owned by Anbang Insurance Group Co. in Beijing.

Last Year’s Stories

• Two last things to say that our hospitality predictive skill is kind of a big deal: Our company to watch in 2017 was Pacific Hospitality Group, and our person to watch was Jay Burress, chief executive of Visit Anaheim.

Hotel owner-operator PHG opened AC Hotel Irvine, sold premier resort Bacara near Santa Barbara, and bid adieu to President Steve Arnold, with founder and Chief Executive Tim Busch taking that role.

Visit Anaheim expanded its sports events work, moved into new digs near Anaheim Stadium, and began to see the fruits of its selling into the 200,000-square-foot expansion of Anaheim Convention Center.

Even a blind squirrel …