Hard-Hit Inns Look for Relief To Come Soon

By DEBORAH BELGUM

Staff Reporter

Downtown Los Angeles hotels had their worst month for business in December since the riots in the early ’90s, registering a 26.7 percent occupancy rate and prompting further cost-cutting at the beleaguered establishments.

The results capped what started out as a mediocre year but turned dismal following Sept. 11.

“In my 30 years in business, there has never been a month that comes as close to being a disaster as December,” said John Stoddard, general manager of the 900-room Wilshire Grand Hotel, the second largest hotel in the downtown area.

There are some indications of a rebound this month, fueled by several major events at Staples Center, the Los Angeles Convention Center and other venues.

With downtown hotels filling up, hotel workers are gradually being called back to their jobs. Nearly all of the 1,500 to 2,000 unionized hotel workers laid off after Sept. 11 are now working, said Maria Elena Durazo, president of the Hotel Employees and Restaurant Employees, Local 11. Some are even receiving overtime pay.

But Bruce Baltin, senior vice president of PKF Consulting, a hotel consulting firm in L.A. that tracks occupancy rates, sees only modest growth this year.

“It’s not a pretty picture,” said Baltin. “A large part of the downtown market has been affected by the international tour travel business, and they’re not coming back yet.”

That was borne out by the terrible December, with three out of four hotel rooms empty. The only other month that even compares is December, 1992 when the downtown occupancy rate was 32.8 percent the result of the April 1992 L.A. riots and a recession that was still going strong. In December 2000 the downtown hotel occupancy rate was 44.5 percent.

For all of 2001, the occupancy rate was 55.1 percent, compared with 68.1 percent in 2000. Hotels generally need a 60 percent rate to break even because of the fixed costs involved in keeping a property running.

Trimming amenities

Many downtown hotels slashed expenses after Sept. 11 by laying off housekeepers and other staff and closing entire floors to conserve energy and cleaning time.

Kenji Yoshimoto, general manager at the 434-room New Otani Hotel and Garden in Little Tokyo, replaced his fresh flower arrangements with artificial flowers. He also laid off the pianist, who for the last six years has played in the Rendezvous Lounge.

“Business is gradually coming back, but not as much as we had hoped,” said Yoshimoto, noting that Japanese tourists still aren’t traveling.

In November, the concierge at the Wilshire Grand was laid off, leaving guest questions about restaurants, tours or directions to the front desk clerk or the bellhops. The concierge will be rehired when the occupancy rate hits 60 percent, Stoddard said.

Right after Sept. 11, the Millennium Biltmore Hotel closed one restaurant, Bernard’s, and converted it into a private dining room. The hotel has no plans to reopen it, said Steve Haller, the Biltmore’s director of sales and marketing. “Because there are so many good restaurants on the street, the days of the fancy hotel restaurant has seen better days,” Haller said.

January boost

For all the bad news, January saw a significant pickup and February is expected to be busy as well. It started with the Rose Bowl game on Jan. 3, when 50,000 University of Nebraska fans and a few thousand University of Miami supporters crowded into area hotels.

Then the U.S Figure Skating Championships were held at Staples, leaving the Millennium Biltmore filled for 10 days with young skaters and their parents. The Wyndham Checkers, an upscale hotel on Grand Avenue, hosted skating officials.

The semi-annual California Gift Show at the Los Angeles Convention Center attracted nearly 28,000 buyers to L.A. last week, spending as much as five to seven days at downtown hotels. And the National Hockey League All-Star Game is scheduled for Feb. 2.

One thing helping all hotels around the city is the steep decline in natural gas prices. This time last year, the Wilshire Grand was paying seven times what it is paying now for natural gas, resulting in a $150,000 a month saving, Stoddard estimated.