Orange County Business Journal
05/29/17

Area Hospitality Steady in Rooms, Trends, Money
By Paul Hughes

http://www.ocbj.com/news/2017/may/29/area-hospitality-steady-rooms-trends-money

Waterfront Beach Resort, A Hilton Hotel shuttered six of its 290 rooms last year, but it had a very good reason—the move helped make way for about 150 more in a new tower that’s scheduled to open in September.

“We had to take some out with the expansion connector” that will link the two towers, a spokesperson said.

The results appear to be worth it.

Waterfront drops two slots on this year’s Business Journal list of the largest OC hotels ranked by room count from No. 38 to No. 40. But with the new tower, it would vault 23 slots next year to No. 18 on a ranking not known for radical shifts.

When the dust clears, Waterfront will have 437 rooms, including 131 new suites at the second tower, among them presidential suites and a specialty bridal suite.

Top 10

Hotels on the list this year combined for an increase of nine rooms out of a total of nearly 22,000, in general not moving the needle.

• Irvine Marriott, however, cracked the top 10 with 11 rooms added as part of a $22 million renovation of the hotel’s arrival area, aesthetics such as water features, food offerings, and all 496 rooms. Work included hardwood floors, sliding doors for bathrooms for more clearance, and turning 75% of room inventory into “shower-only,” in line with a trend toward fewer bathtubs.

General Manager Scott McCoy said the property grew after it moved its lounge from a guest room floor to the lobby level and changed sleeping areas and eliminated dining areas in some rooms and suites.

The M Club lounge presents “a more exclusive modern environment,” and rooms and suites were “more purposefully designed with a more intuitive placement” of features, McCoy said in an email.

Rooms also now have keyless entry and 55-inch televisions that let guests stream content from electronic devices.

Around the Cutoff

A new hotel didn’t make the list, also for a good reason—by design, it’s too small to crack it.

The AC Hotel Irvine opened this past spring at Park Place with 176 rooms—the list requires at least 250.

But AC is a Marriott brand aimed at the lifestyle traveler—think millennials with money—and commonly has fewer than 250 rooms at its locations, about 100 of which are open or in development globally.

OC’s AC is owned by an affiliate of Pacific Hospitality Group in Irvine that bought it for $54 million and is run by Pacific Hospitality. Amenities include a heated rooftop pool, tapas bar, library and curated art.

• Paséa Hotel & Spa in Huntington Beach, another Pacific Hospitality property, is co-owned by an affiliate and run by the management company. It debuts on the list at No. 49 with just enough rooms—250.

Trend Lines

Orange County’s hotel market is steady, industry groups said.

CBRE Hotels in Los Angeles forecasts 3.2% growth this year in average daily rates to $155.65 and 2.5% in revenue per available room to $121.86. Occupancy will flatten to just under 78% as rates rise, CBRE said.

The Orange County Visitors Association in Irvine said countywide travel-related spending topped $12 billion last year, and Visit Anaheim said the city had 568 events drawing 1.6 million people to book 850,000 rooms. The groups market the county and Anaheim for travel and tourism (see stories, pages 1, 14, 15).

The county had 61,809 hotel and motel rooms as of last week, up from 59,564 two years ago, according to data from consultant and broker Atlas Hospitality Group in Irvine.

Atlas founder and President Alan Reay said another key element of OC’s hotel market—investment—is strong.

“Orange County is in the top three markets for [hotel] buyer inquiries in California,” he said.

The two strongest are the Bay Area, including Silicon Valley, and West L.A.

Local attractions and a strong business profile produce hotel stays from “travel and tourism on the weekends and corporate travel Monday to Thursday.”