Orange County Register
Developers Rush to Build Orange County Hotels
By Jonathan Lanser
Orange County is in the middle of a hotel construction boom.
Three hotels opened in Orange County last year, adding 606 rooms for visitors to choose from, after four hotels with 699 rooms opened in 2014, Atlas Hospitality reports. The largest hotel to open in 2015 was the 221-room Courtyard Anaheim Theme Park Entrance.
This year will be even busier. Orange County has 12 hotels with 2,461 rooms scheduled to open as soon as this year, Atlas reported. The highlight of this building boom is the 603-room Great Wolf Lodge in Garden Grove, which opened Friday.
In addition, Orange County has another 25 hotels with 4,234 rooms in various stages of planning.
The building boom follows a sharp recovery for tourism. Room rates soared 31 percent in the last year years, according to CBRE Hotels.
“We’re OK for the next couple of years,” says Alan Reay, Atlas president. “But lenders and buyers are now showing a little but of caution.”
Hotel business fundamentals are strong, and it should stay that way throughout 2016, Reay says. Record profits lured developers back into building hotels, as rising prices for lodging properties pushed the value of old hotels well above replacement costs.
Still, after six straight years of growth, Reay notes that worries are quietly popping up about how long the industry’s streak of success can last.
“If I can guarantee you one thing, it’s that this business always comes full circle,” Reay says. “The only thing I don’t know is when that will happen.”