OC Hotel Development Steady; More to Come

OC Hotel Development Steady; More to Come

Orange County Business Journal

OC Hotel Development Steady; More to Come
By Paul Hughes



Three new Orange County hotels with 445 rooms opened in the first half of 2018, according to data from Irvine hotel broker-consultant Atlas Hospitality Group.

The three were

• Hampton Inn & Suites in Irvine, with 164 rooms

• Waterfront Hilton Beach Resort’s second tower in Huntington Beach, with 151 rooms

• Lido House in Newport Beach, part of Marriott’s boutique Autograph Collection, with 130 rooms

OC has nine hotels with about 2,400 rooms under construction; the largest is Westin Anaheim Resort by Anaheim-based Wincome Group, a 613-room project next door to Anaheim Convention Center.

The county has 63 hotels with about 10,750 rooms in planning—up 26% and 3%, respectively.

A dozen additional hotels in planning with about the same number of rooms suggest smaller hotels on the drawing boards. The select service niche, typically a smaller product, has been popular and land is less available for larger projects in OC. Demolishing an older hotel—as Wincome did for WAR—can allow a larger footprint and the Anaheim hotel market has been hot for several years.

Atlas says this is also true statewide.

“2017 was a record-breaking year for California hotel development … 2018 is on pace to eclipse it,” the report said.

“Lenders and developers continue to be very bullish” on new hotels in the state, it said, despite a “20% to 25% boost in construction costs over the last 12 months.”

26 hotels opened through the first six months of 2018—same as last year—but hotels under construction were up 41% to 183 properties with 26,000 rooms, up 42% year-over-year.

Hotels and rooms in planning statewide were up 24% and 20%, respectively: about 960 hotels with 136,700 rooms.

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