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Hot Summer for Hotels

By Ed Moosbrugger

July 2 -- Downtown Santa Monica hotel managers expect a hot summer this year, and it isn't the weather they're referring to. It's increased business.

"Summer looks excellent this year," said Robert Farzam, general manager of the Best Western Ocean View Hotel. He expects business at the hotel to increase at least 10 percent over last summer from a combination of higher occupancy and increased room rates.

Several factors are contributing to the good outlook.

Dino Nanni, general manager of the Hotel Shangri-La, noted an improved economy, a weak dollar and increased international and business travel, among other factors.

"The international is definitely coming back, and that's a big chunk of our business in Santa Monica," Nanni said.

Signs of solid prospects for the summer are evident. Some hotel managers report that travelers are now booking more in advance rather than waiting until the last minute, and hotels are able to get better room rates.

Reflecting the change in atmosphere, travelers last year were likely to ask first what the best room rate was, but now they are more likely to ask first whether a room is available, Nanni said.

"Discounting is starting to go away, and I don't expect any discounting this summer," he said.

Business seems to be up at a wide range of hotels, from luxury to tourist class, said Sherry Kellogg, general manager of Hotel Carmel.
"The numbers have been real encouraging," Kellogg said, adding that some travelers are still in the market for deals.

Misti Kerns, president and CEO of the Santa Monica Convention & Visitors Bureau, expects a "great" summer, based on trends in bed tax revenue and "just the multiple languages we can hear again on our streets and at our visitor services locations."

If Santa Monica has a strong summer, it will be in line with national forecasts for improved travel business.

The Travel Industry Association of America has forecast a record- breaking summer travel season.

And there are positive signs as well in TIA's annual U.S. forecast for 2005. It predicted a 5.6 percent rise in travel spending, led by a 9.6 percent jump in international visitor spending and a 6.5 percent increase in international visitors.

Santa Monica hotel operators take comfort from forecasts that international passenger traffic at LAX will rise 10 percent this summer, aided by low air fares and a weak dollar. Santa Monica gets an unusually large portion of its business from foreign visitors.

That's reflected at Best Western Ocean View. "In August we get a lot of Italians," Farzam said. "There are a lot of foreign travelers in August."

Kellogg reported that international business is up at Hotel Carmel, with Australia-New Zealand, Europe, Japan and South America among the most important markets for the hotel.

Kellogg markets heavily to the Japanese, partly because Japanese visitors tend to stay longer in one place than some other visitors.

Through the first four months of 2005, Santa Monica hotels turned in a mixed performance. The occupancy rate dipped 0.5 percent to 78.2 percent, while the average daily room rate increased 6.7 percent to $218.08, according to PKF Consulting.

For the first third of 2005, Santa Monica's occupancy rate was slightly above the county average, while its room rates ranked second behind Beverly Hills in markets tracked by PKF.

Santa Monica's numbers were affected by the shift of the American Film Market from February/March to November this year.

In April, Santa Monica's hotel occupancy rate fell 2.5 percent, but the average room rate jumped 11.1 percent.

Kerns reported that bed tax revenues are running ahead of forecast.
She also reported a positive experience at a recent convention of large international tour operators.

"The demand for Santa Monica as a destination is there," Kerns reported.

Among the visitors bureau's initiatives are a Santa Monica branding strategy and a West Los Angeles partnership with the Beverly Hills, West Hollywood and Marina del Rey bureaus.

"Our first collaborative program is a GPS-driven online regional map," Kerns said. The Santa Monica bureau also plans to launch a new Web site this summer.

The bureau recently closed its Visitor Center at Santa Monica Place and moved some of the services to the guest services desk at the mall. It plans to open a walk-in Visitor Center with a store front entrance on Main Street in mid July.

Once Santa Monica Place is re-done by owner Macerich Co., the bureau hopes to again have a Visitor Center there, Kerns said.

"We are working in concert with Macerich, who understands we need to be in a marketable location, long term," Kerns said.

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