O.C. Hoteliers Enjoy Brisk June Business

Tourists kept Orange County hotels hopping in June, as average occupancy soared with the official arrival of the summer travel season.

Countywide occupancy reached 83.9% in June, up from 75.1% in May and 80.6% in June 1995, according to a figures compiled by PKF Consulting, a Los Angeles hospitality consulting firm.

Business was particularly brisk in Anaheim, where innkeepers credit the continued popularity of Disneyland’s Indiana Jones Adventure and the farewell season of the Main Street Electrical Parade for attracting a flurry of overnight visitors.

Average occupancy in Anaheim reached a stratospheric 88.3% in June, compared with 79.7% in May and 85.4% in June 1995.

“This summer is undoubtedly our best ever,” said Steve Reynolds, general manager of the Anaheim Hampton Inn, about a mile from Disneyland. “We’re seeing occupancy of 95% to 100% during the week, and the weekend business is strong as well.”

Despite robust demand for Orange County hotel rooms, rates remain sluggish. The average price for a room reached $82.85 in June, up only 2.5% from June 1995, thanks in large part to stagnant rates in Anaheim, the county’s largest hotel market.

Anaheim’s average rate of $87.30 increased a mere 34 cents over the same period last year, as hoteliers continued to compete fiercely for the price-sensitive summer crowds.

One bright spot for operators was the John Wayne Airport area, where the average June room rate of $77.56 was up nearly 10% over the same period a year ago.

Margo Repta, general manager of the Marriott Suites Costa Mesa, said multimillion-dollar renovations at a number of airport-area hotels have emboldened hoteliers to demand higher rates for their spiffed-up properties. So far, business travelers, who are less price-sensitive than tourists, haven’t balked at the rate hikes.

“Business travelers realize we’re still a bargain compared to the rest of the country,” Repta said.

The June figures signaled continued momentum in the county’s tourist industry, which has seen occupancy top 1995 levels through the first half of the year.

During the first six months this year, countywide hotel occupancy averaged 74.1%, compared with 70.4% for the same period last year. Average room rates reached $83.17 for the first six months, up 3% over last year’s first half.

Conditions look good for continued strong occupancy throughout the summer, said PKF researcher Melissa Mills. Disneyland is on pace for record attendance and could well shatter the old mark set last year when the park hosted an estimated at 14.1 million visitors.

Mills said heavy tour group business has prevented many Anaheim hoteliers from raising their rates in response to increased demand.

Reynolds said some operators didn’t anticipate that 1996 would turn out to be such a strong year for tourism. So last year, they locked themselves into group business rates that are lower than what they could command today.

“Indiana Jones has remained bigger than anyone thought,” Reynolds said. “Some hotels may have been more aggressive [with discounts] than they should have.”

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Orange County hoteliers were busy in June, with occupancy rates rising as summer began. Room rates were relatively stable. How this June’s figures compare with last year’s:

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Average Daily Room Rate Occupancy Rate 1996 1995 % Change 1996 1995 % Change Anaheim $87.30 $86.96 0.4% 88.3 85.4 3.4% OC Airport 77.56 70.62 9.8 75.2 74.9 0.4 North OC 57.63 56.43 2.1 82.1 73.7 11.4 South OC 101.74 94.50 7.7 73.8 64.5 14.5 Countywide $82.85 $80.80 2.5% 83.9 80.6 4.1%

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Source: PKF Consulting