Pain Continues for Downtown Hotels As Business Lags
Retail
by Deborah Belgum
The big downtown L.A. hotels turned in their worst occupancy rates so far for the year in April.
On average, hotels were only 38.5 percent full during the month, a significant drop from March when hotels had a 45 percent occupancy rate. That’s a major decline from April 2001 when occupancy rates averaged 54.8 percent, according to PKF Consulting, which tracks hotel occupancy rates.
The poor showing is surprising to officials in the industry because tourism and business travel were improving during the first quarter of the year.
Hotel managers noted there weren’t many conventions in town in April, and Easter, which always decreases business travel the week after, fell on March 31.
“The Spring Internet World convention, which was here this April, was not as heavily attended as last year, said John Stoddard, general manager of the Wilshire Grand Hotel in downtown L.A. “Last year, we had 2,000 room nights booked for it and this year we had only 85 room nights.”
According to Bruce Baltin, PKF Consulting senior vice president, the hotel market is “still very fragile” despite an improvement early in the year.
Hotel occupancy rates in the rest of Los Angeles County were mixed. Hotels around Los Angeles International Airport had occupancy averaging 67.8 percent, compared with 73.4 percent in March and 78.9 percent in April 2001.
However, the hotel industry in Santa Monica remained strong, with occupancy averaging 76 percent compared with 68.3 percent in April 2001.
While April was pretty glum for the downtown hotel market, figures for May and June are expected to be better. In May, the town was filled with visitors attending the Electronic Entertainment Expo.
Several trade shows are scheduled for the L.A. Convention Center in June.
Bread Factory
Panera Bread Company is not only planning to open 14 Panera Bread cafes in Los Angeles next year, but the St. Louis-based company is scouting sites for a 6,000- to 10,000-square-foot facility where dough would be made and shipped to its surrounding cafes.
Panera has narrowed the selection to three sites in central and east L.A. area, said William Moreton, Panera’s chief financial officer.
Critical to the deal is the ability to have a first option on adjoining space to be able to expand as the restaurant chain expands.
“The dough facility will be ready to go about two to four weeks before the first caf & #233; opens,” said Moreton, noting the team opening the cafes is looking for locations in the area.
Panera Bread has 390 locations in 30 states, but none in California. It is planning to start in Los Angeles and expand toward San Diego. Mostly located in shopping malls, the restaurants offer a variety of freshly baked sourdough and European breads and other baked goods, as well as a menu of salads, soups, sandwiches and premium coffee. Panera Bread has commitments to open about 520 new franchises.
Staff reporter Deborah Belgum can be reached at (323) 549-5225 ext. 228, or at
[email protected].
