WEHOville
03/29/17

Mayor Meister Calls for a Moratorium on New WeHo Hotel Construction
By Staff

http://www.wehoville.com/2017/03/29/mayor-meister-calls-moratorium-new-weho-hotel-construction/

Mayor Lauren Meister will ask the West Hollywood City Council on Monday to declare a moratorium on the development of new hotels in WeHo until the city can conduct a new study on their impact on the existing hotel market.

In her proposal, Meister notes that last September the Council was given an analysis of the WeHo hotel market that projected a major decline in hotel occupancy and in the rate per hotel room if the city grants permits to hotel projects currently under review on top of those that already under construction or that already have been approved for construction. Yet, she said in an interview with WEHOville, the Council simply “received and filed” the analysis without acting on it.

The analysis, by PFK Consulting and CBRE Hotels, noted that WeHo hotel projects under review, under consideration and already approved for construction would add 1,229 rooms to the city’s current 2,060 hotel rooms, an increase of 60%. The study projected that by 2020 the hotel room occupancy rate would fall to 68% from the rate of 83% in 2015. It also said that the average daily room rate would fall to $243 from an average of $279 if both hotels that have been permitted but aren’t yet under construction and those that are under review but not yet permitted actually are built.

An analysis of the PFK/CBRE study by the Atlas Hospitality Group, a hotel financing and advisory group, reported that the additional hotels would “cannibalize the market.” In her presentation to the Council, Meister notes that the study said it would take until 2026 for the city’s hotels to return to the 80% occupancy rate. In recent times the existing hotels have been at that rate or higher…