New Financial District Hotels Drive State Record

New Financial District Hotels Drive State Record

Los Angeles Business Journal

New Financial District Hotels Drive State Record
Three properties add 1,465 rooms, nearly one-third of six-month total.
By Jerry Sullivan

Downtown’s Financial District accounted for nearly one-third of the number of hotel rooms added to the industry’s inventory statewide in the first half of the year, thanks to a pair of high-profile entries and the arrival of a traditional boutique.

The InterContinental Hotel led all projects in the state when its 889 rooms debuted with the opening last month of the Wilshire Grand Center. The hotel partially occupies the 73-story tower, the tallest building west of the Mississippi River, at Wilshire Boulevard and Figueroa Street. The Hotel Indigo added 350 rooms a few blocks away on Ninth and Francisco streets, and the boutique Freehand Los Angeles accounted for 226 rooms at Eighth and Olive streets.

Those three combined for 1,465 new rooms and drove a statewide record of 4,730 for the first half of 2017, according to Alan Reay, president of Irvine-based Atlas Hospitality Group, which provided the data in its recent midyear survey.

Reay said the biggest batch of new hotel rooms over a six-month period prior to this year’s burst was 2,502 in 2008.

Downtown’s new rooms over the first half of this year came to 31 percent of the statewide total; 27 percent of the 3,931 added throughout Southern California; 83 percent of the 1,742 in the city; and 58 percent of the 2,527 across Los Angeles County.

Those numbers compare with the addition of 461 rooms over three projects that were completed during the first half of the year in Orange County; 433 rooms at two hotels in San Diego; 411 at three establishments in Riverside County; 99 rooms at one hotel in San Bernardino County; and 799 rooms at seven projects in Northern California.

Reay said he’s picked up on concerns that – even with the recent additions – Los Angeles could lose out on valuable convention business because of a shortage of rooms that are of sufficient quality within walking distance of the Convention Center and LA Live.

San Francisco and Anaheim have shown a willingness to expand convention facilities and add hotels to keep pace with visitor capacity, while San Diego is considering similar moves at its center, according to Reay.

“It’s a very competitive field,” he said.

Reay covered his bets, though, noting the comparison to the last big addition of rooms in 2008, and issuing a caution that an economic dip could trim demand if it’s deep enough to cut into spending on business travel.

Another caution came as Reay noted that the prior record for new additions came in the first half of 2008, just before the onset of the Great Recession – with an InterContinental Hotel part of the count back then – although in San Francisco rather than Los Angeles.

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