Universal City hotel expansion project clears early approval hurdle

Construction of a new high-rise addition to the Hilton hotel in Universal City was approved by the Los Angeles Planning Commission, clearing a major hurdle for the long-planned expansion.

The decision comes as Universal Studios and other popular tourist destinations in the region shine for hoteliers even as other properties in California’s urban centers struggle to fill their rooms.

The commission recommended last week that the City Council approve construction of an 18-story addition to the 24-story Hilton Los Angeles/Universal City hotel, which opened in 1984. The addition would have 395 rooms, bringing the total between the two structures to 890 rooms, putting that Hilton among the ranks of the largest hotels in Los Angeles County.

Hotels near popular leisure destinations such as Disneyland and Universal Studios Hollywood are outperforming California hotels that are intended to serve business travelers and meetings, said hotel consultant Alan Reay, president of Atlas Hospitality Group.

“Big full-service hotels have been really impacted by the work-from-home movement and the pullback of the convention and meeting business,” Reay said.

Universal City is “a little island that is doing phenomenally well,” he said, with average occupancy at the Hilton there at 92% last year.

“I don’t know any other hotels that are running that kind of occupancy” at a similar price point, he said. “That really tells you the strength of the location and the strength of the brand.

“It makes sense to add the rooms,” said Reay, who is not involved in the planned development.

The addition would include, three restaurants, two swimming pools and an expansion of the existing three-level parking garage.

(Ankrom Moisan)

The expansion is proposed by Sun Hill Real Estate, which owns the Universal City hotel operated by Hilton.

Sun Hill President Mark Davis said the company is “immensely gratified” to have the Planning Commission’s endorsement.

“We still believe in the future of L.A. and the continued growth of our primary demand driver, Universal Studios Theme Park, the key magnet to attract tourism to the City of Angels,” he said in a statement.

If approved by the City Council, construction would take about 30 months, according to city documents recommending development. An expansion of the Hilton was first proposed in 2017, when it was estimated that more than 70% of guests were there to visit the Universal Studios Hollywood theme park that features the $500-million Wizarding World of Harry Potter.

The design of the addition by architecture firm Ankrom Moisan also calls for a spa, three restaurants, an indoor-outdoor bar, two swimming pools and an expansion of the existing three-level parking garage.

The planned expansion, which Sun Hill intends to complete in time to serve the 2028 Olympics, comes as hotel sales are flagging in Los Angeles County and throughout the state amid high interest rates and as smaller-sized deals have been a drag on the market, according to a recent report from Atlas Hospitality.

Times staff writer Caroline Petrow-Cohen contributed to this report.