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Santa Monica Tourism Remains Steady and Strong

Santa Monica Real Estate Company, Roque and Mark

By Ed Moosbrugger

January 18, 2013 -- After a strong 2012, Santa Monica’s visitor industry will need to work hard to maintain its high level of performance in the face of continued economic challenges, according to hotel and tourism officials.

Santa Monica did better than expected last year, with the number of occupied hotel rooms jumping an estimated 4.4 percent and occupancy holding steady at about 83 percent despite more hotel rooms on the market, according to an estimate by PKF Consulting USA.

But PKF has forecast no growth in hotel occupancy in 2013 for Santa Monica, although it expects the average daily room rate to rise 6 percent to $305.91.

People in most sectors of the local visitor industry were busier than projected in 2012, said Misti Kerns, president and CEO of the Santa Monica Convention & Visitors Bureau (SMCVB).

At the Fairmont Miramar Hotel & Bungalows, occupancy and room rates were at new highs, said Wolfgang Jonas, general manager of the biggest hotel in Downtown Santa Monica.

“2012 has been a very strong year for us,” Jonas said. “It was a very strong year from the beginning.” He expects another strong year in 2013, although occupancy probably will be close to flat because hotel occupancy rates are already high in Santa Monica.

The city’s occupancy rate of 83 percent is projected to be about five percentage points higher than nearby Marina del Rey and Beverly Hills/West Los Angeles, according to PKF. Jonas said some Santa Monica hotels exceed 90 percent occupancy.

Santa Monica remains one of the most popular destinations in Los Angeles County, Jonas noted.

Despite this strong performance, Santa Monica faces challenges.

“It is all about sustaining our current pace and looking at which segments may be poised for growth,” Kerns said. “While trending well this year (2012), the future forecast is not as rosy and remains uncertain. The outlook for domestic visitation is still uncertain as Americans continue to respond to the economic climate.”

A September report by Visit California, the state’s tourism promotion arm, indicated a likely drop in domestic visitors to California from other states over the following 12 months, although there will be more in-state travel, Kerns said.

Nationally, domestic leisure travel is expected to grow 1.2 percent in 2013, but growth will be slower than during the past few years, according to the U.S. Travel Association. Business travel growth will slow significantly, to less than one percent, before showing more positive growth in 2014.

“While the growth rate is more moderate than in previous years, leisure travel remains at an all-time high and is an indicator of rising consumer confidence,” said David Huether, senior vice president of research and economics for the U.S. Travel Association.

The outlook is brighter for international travel to the United States, with a predicted increase in travelers of 4.3 percent (excluding Canada and Mexico). International travelers are a big part of Santa Monica's visitor market.

Jonas said the Fairmont Miramar has seen increased leisure and business travel and its group business is very strong. He noted that the incentive business is beginning to come back. The hotel has picked up substantial business from people staying in town to shoot commercials. Kerns reported that, overall, leisure and business travel is currently performing better than group travel.

“We are experiencing a lot of interest from South America, Australia and China,” Jonas said. Some of that interest stems from work being done by the SMCVB.

“While global uncertainties remain, our research points to opportunity in very specific international markets,” Kerns said. “The outlook remains positive with half of Santa Monica’s visitors coming from outside the United States.”

The United Kingdom/Ireland and Australia/New Zealand continue to be Santa Monica’s top two international markets. SMCVB representatives held business meetings in Europe, Australia and Brazil in 2012 to promote the beachside city.

Santa Monica benefited from several big events in 2012, including Rose Bowl pep rallies, Cirque du Soleil and the annual American Film Market, which draws about 8,000 people from more than 70 countries. AFM had a strong year, with a 6 percent increase in the number of film buyers attending the event.

“The healthy growth in new buying companies is the most important metric for us,’ said AFM Managing Director Jonathan Wolf. “It shows the global marketplace for independent film is continuing to expand.”

Santa Monica, with its strong presence in the entertainment and media businesses, is a natural for the AFM. The big trade show gives Santa Monica wide international exposure. Among regions that had a big increase in buyers at the 2012 AFM were Asia and Latin/South America.

Kerns noted that there are several big events in 2013, including GLOW 2013 on Sept. 28, the return of AFM and a strong possibility that Cirque du Soleil will return.


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