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Monday, Sep 26, 2022

Hotel Room Boom

Hotel developers have been on a roll in Los Angeles with new properties rising in recent years to meet soaring demand downtown, in Hollywood and beyond.

Between 2013 and 2017, the number of hotel rooms within walking distance of the L.A. Convention Center nearly doubled, according to a study conducted by the city.

“We were significantly under-hoteled,” said Nick Griffin, executive director for the Downtown Center Business Improvement District.

And construction continues at a strong clip. At the end of 2018, there were 11 hotels under construction in downtown alone, four more in Hollywood, and dozens in other parts of the county, according to Atlas Hospitality Group. Biggest projects were the 347-room Hotel Clark and the 309-room Equinox hotel, both downtown.

Overall, 11 hotels opened in L.A. County, and 45 additional projects were under construction in 2018. By the end of 2019, Atlas estimates new developments will add nearly 3,000 hotel rooms in the L.A. market.

Competing for travelers

Choice Hotels International Inc., which owns Comfort Inn, Quality Inn, Econo Lodge and other brands, has roughly 30 hotels in the L.A. market. The group recently started construction on a Cambria hotel — one of its higher-end brands — on Spring Street downtown.

The 13-story, 180-room hotel is repurposing the former home of the Los Angeles Police Department’s Vice Squad. It’s slated to open next year.

Janis Cannon, senior vice president of upscale brands at Choice Hotels, said the group was interested in downtown for the wide range of travelers it draws. “Cambria Hotels are strategically developed in locations near area business, entertainment and leisure attractions and convention centers,” Cannon wrote in an email.

Nadel Architects Inc.’s Andrew Simmons is working on the Cambria, along with a handful of other projects around the county. “It’s a good time to design and build hotels,” he said.

Some of the biggest hotels to open downtown in recent years are the 241-room NoMad Hotel and the 200-room Freehand.

“There is a real race to be unique,” said Jonathan Watts, a partner at architecture firm KFA, who worked on the Ace Hotel, the NoMad and the Freehand.

Watts, who is involved with L.A. projects such as SoHo Warehouse in the Arts District, said new luxury hotels are adding amenities that set them apart from other properties, including offerings like screening rooms, bowling alleys and climbing walls.

The main draw

Many hotels under construction downtown are located near the Convention Center. Developers and city officials hope the additional rooms will help L.A. go after bigger conventions and draw more travelers.

“L.A. has not been able to attract as many conventions as cities like Las Vegas because they didn’t have the hotels,” said Chris Redfearn, a real estate professor at USC.

According to Trade Show News Network, the Las Vegas Convention Center drew 15 of the top 100 trade shows last year while L.A. nabbed only one. As of March, Las Vegas counted 166,122 hotel rooms with 8,247 more under construction, according to industry research firm STR Inc. The L.A.-Long Beach market had 104,499 hotel rooms with 5,982 under construction as of last month, STR reported.

Redfearn said Los Angeles is increasingly better positioned for conventions and visitors, thanks to the increase in rooms downtown. It also helps that the city has taken up the cause.

In November, the L.A. City Council approved a $1.2 billion proposal that will add hundreds of hotel rooms at L.A. Live and increase the size of the nearby Convention Center. Developer Anschutz Entertainment Group Inc. will get $97.7 million worth of incentives for the project.

Courting leisure travel

Griffin said downtown has been attracting more leisure travelers, as well.

“That is partly because the profile of businesses that are in downtown has been diversifying,” he said. Once home to law firms and finance groups, downtown now has more tech, media and fashion companies.

Last year, 22 million tourists visited downtown, Griffin said. And overnight visitors have grown 65% in the last four years, he added.

Beyond the core markets, hotel developments are popping up everywhere from San Gabriel to Hawthorne to North Hollywood. There were 11 hotels under construction on the Westside, including two in West Hollywood and two in Culver City.

Of the 45 projects underway, 13 will have more than 200 hotel rooms.

“It feels to me like there’s going to be a more mature, denser, more active downtown area for a lot of parts of L.A.,” Redfearn said. “A lot of places are going to grow up and fill in.”

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans covers real estate for the Los Angeles Business Journal. A USC grad, Madans has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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