L.A. Expansion: Venice property is Starcity’s first outside the Bay Area.

L.A. Expansion: Venice property is Starcity’s first outside the Bay Area.

Los Angeles County hotel room rates keep increasing despite the region’s position as the statewide leader in new hotel construction.

That according to a recent study by CBRE Group Inc., which projects average daily room rates to rise 3.1 percent this year from last year’s average of $181.56. L.A.’s rate increase outpaces the projected national jump of 2.8 percent, which by CBRE’s estimates would raise average U.S. daily hotel room rates to $130.08.

CBRE expects L.A. rates will continue to rise next year to $186.54, another 2.7 percent jump that would also surpass the nation’s 2.6 percent projected average increase.

Revenue per available room – which the hotel industry uses to measure a hotel’s ability to fill its available rooms – is expected to climb 2.7 percent to $144.65 in L.A. County this year, and another 2.7 percent next year to $148.57, CBRE said.

Overall hotel occupancy is expected to stay mostly flat next year at 79.6 percent from the current 79.7 percent – still healthy by industry measurements.

“Demand is keeping up with supply growth, and occupancy levels remain good by local and national standards,” said Bruce Baltin, managing direct of CBRE Hotels Consulting, in a statement.

Baltin stressed that new hotel construction in Los Angeles grew at only one-third of the national pace over the last three decades.

“Now that we are finally seeing new hotels being added, they are quickly being absorbed by business travelers, out-of-town tourists and locals alike,” he said, noting that downtown Los Angeles and the coastal areas of the county are the most popular destinations.

The pace of L.A. hotel growth might be slower than elsewhere in the country, but there are new projects coming online. The region added more than 4,300 new hotel rooms last year, the most in California, and also finished last year with 33,500 hotel rooms on the drawing board, according to Atlas Hospitality Group’s California Hotel Development Survey for 2017.

Nationwide, new hotel rooms coming online should not be a concern for established hotel operators, CBRE said. Demand is expected to exceed moderate new-supply levels through next year.

CBRE expects nationwide supply will climax with a 2 percent gain this year and then stabilize at the long-run average of 1.9 percent for each of the following two years.

Communal Housing Expands

San Francisco-based Starcity Properties Inc., a developer of communal living spaces for middle-income city dwellers, has chosen Venice for its first property outside of the Bay Area, and will open it this month at 29 Navy St.

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