Inside the glassy towers of the downtown Westin Bonaventure, the management of L.A.’s largest hotel is rolling out the red carpet hoping that this summer delivers a more abundant crop of guests than did the early part of the year.
Among the incentives is a special summer package called the Heavenly Weekend, designed to entice weekend travelers to stay in the glitzy compound. The package features a room rate of $149 per night, a champagne breakfast and a late checkout time of 4 p.m.
The moves come as business travel and convention business, the staple of L.A.’s downtown hotels, has seen a dip. Vacancy rates in the downtown area are off, and the Bonaventure, which has 1,354 rooms to fill, has had a rough time this year, concedes Brian Fitzgerald, the hotel’s general manager.
But there are indications things may rebound. Several major conventions are scheduled this summer for the Los Angeles Convention Center, including the Harley-Davidson convention in July, which alone is creating a demand for 11,000 hotel room nights. The National Education Association also is coming to town, adding a demand for another 41,000 room nights.
“I think this summer is going to be better than last summer if all the groups hold together,” Fitzgerald noted.
It’s that sort of optimism that has allowed innkeepers to keep room rates high, even in the face of increasing vacancies.
Room rates at Los Angeles hotels are 3.5 percent higher than last summer, to an overall average of $127.06 a night. “Most hotel operators believe that if you decrease your room rates, it is harder to increase them later on,” said Jeff Dallas, a hotel industry expert with Ernst & Young.
Hoteliers like Fitzgerald are crossing their fingers that work-weary tourists in search of sun and fun will think of Los Angeles when it comes time to plan their vacations.
Industry experts believe they will. Despite rising gasoline prices, the bleak news of an energy crisis and a strong dollar, analysts said tourists would not stay away from L.A.’s famous attractions and beaches.
“All the surveys show that summer travel and hotel stays should be up 2 to 3 percent over last year,” said Bruce Baltin, a hotel industry expert with PKF Consulting.
While not blockbuster growth, it’s still good news for hotels. During the first quarter, hotels had flat occupancy rates over the same time period last year.
Downtown demand
In downtown Los Angeles it was worse. Hotel occupancy rates were down 8 percent during the first quarter compared to the previous year.
In many ways it would be hard to match last year’s numbers, when more than 32,000 people were in town to either attend the Democratic National Convention or to cover it.
In addition to not having a single, large event like the convention, there are two new large hotels coming on line to add to the competition. The Courtyard by Marriott in Pasadena opened with 312 rooms, and five-star St. Regis Hotel opened in Century City with 322 rooms.
As spread out as the market is, there is also competition from Orange County, which would love to snap up all tourists that cross the California border and put them up in a hotel around Walt Disney Co.’s new California Adventure resort and sister theme park Disneyland.
In Anaheim, Disney opened the 750-room Grand Californian Hotel in January to much fanfare, and followed with the smaller, 502-room Paradise Pier Hotel in February.
“They have created a very good mousetrap down there, so to speak, to capture more room nights,” said Mike Collins, executive vice president of the Los Angeles Convention & Visitors Bureau.
Increased competition for L.A. hoteliers has been exacerbated by the soft economy, which means travelers are keeping an eye on their travel budgets as rising gas prices cut into their finances.
While surveys show that people will be traveling this summer slightly more than they did last year, they may have to make adjustments in what they choose to splurge on.
“People have a budget, and if part of that has to go to increased fuel costs, where are they going to cut back?” said Dallas. “Lodging might not be the first thing hit. It could be restaurants or retail. But who knows?”
Budget-conscious travelers
According to an American Express Leisure Travel Index, 42 percent of those surveyed said they would stay in a moderately priced hotel this summer and another 37 percent said they would stay with family or friends. Some 16 percent said they would go camping and 14 percent would stay at a budget hotel. Only 14 percent said they would stay in an upscale hotel. (The survey figures total more than 100 percent because most travelers plan to take more than one leisure trip during the year.)
It is logical that a family traveling to L.A. on a budget might choose to stay at a cheaper hotel rather than forego a trip to Universal Studios Hollywood or put off buying a Mickey Mouse hat.
There are a number of inexpensive motels and hotels around that offer true family bargains. Instead of staying in the more popular tourist areas of Santa Monica and Marina del Rey, some visitors may opt to spend a few nights at a hotel near LAX or in Hollywood, where room rates are cheaper.
