Hotels Bouncing Back

By Ed Moosbrugger
Business Writer

June 11 -- Signs point to the strongest summer for Santa Monica’s visitor industry since 9/11, with Downtown hotels reporting improved activity.

“Business is looking good for this summer,” said Sherry Kellogg, general manager of Hotel Carmel. “Everyone is saying the numbers are beginning to look better for summer.”

At Hotel Carmel, advance bookings are higher than in the past two summers, Kellogg reported. Other hotel operators agree things are looking up.

“I’m still optimistic,” said Robert Farzam, general manager of the Best Western Ocean View Hotel. “Summer is looking good.”

Nanni reported that business is getting a little bit better, with occupancy growing, but little improvement in room rates.

The year got off to a slow start, but May has been very strong, and each month business is looking better and better, Kellogg said.

Misti Kerns, president/CEO of the Santa Monica Convention & Visitors Bureau, agrees.

“We are getting stronger every day,” Kerns said. “We are currently running ahead of forecast and think that we could grow in occupancy five percent over last year. The average (room) rate is the bigger question.”

But Kerns cautioned that Santa Monica may be benefiting now from pent-up travel demand and deep discounts by airlines and that the city’s visitor industry may not be in full recovery mode.

That, she said, means businesses need to thank their customers and offer superior guest services because visitors want to experience a whole package that is not just price-driven.

Downtown hotels are taking steps to increase their appeal. Hotel Carmel, for example, expects to complete a $2 million refurbishment by the end of June.

Farzam said the addition of free high-speed Internet access has helped occupancy at Best Western Ocean View because a lot more people are traveling with their laptop computers.

There are mixed reports on how various segments of Santa Monica’s visitor industry are doing.

Nanni said improvement is spread among business, leisure and international guests.
Kellogg reported a lot of Japanese visitors at Hotel Carmel, many of them younger travelers, but said some other hotels say Japanese business has fallen off.

“We have a lot from Australia, New Zealand and Japan,” she said. “U.K. business is strong.”

Farzam reported a boost in business from the big Electronic Entertainment Expo held in mid-May in downtown Los Angeles and hopes there will be more European travelers this summer.

Although Farzam is optimistic about summer business, he is concerned that long lines at LAX may discourage some travelers from coming to the Los Angeles area.

Santa Monica continues to face a difficult challenge in its most lucrative market – international tourism.

“We believe that international tourism, for obvious reasons, has continued to decline,” Kerns said. She thinks, however, that Santa Monica may be picking up some new customers who previously couldn’t afford to stay in the city during peak periods but now can because it’s a buyer’s market.

Travel from the United Kingdom has remained strong, and business travel is slowly picking up, while California is by far Santa Monica’s strongest domestic market, Kerns said.

For the first three months of 2004, Santa Monica’s hotel occupancy rate rose 6.7 percent to 78.7 percent, while its average room rate increased 6 percent to $211.95, according to a report by PKF Consulting and the Los Angeles Convention & Visitors Bureau.

Santa Monica will get a boost this fall, when the American Film Market shifts to its new November trade show dates, Kerns said. Santa Monica also will benefit in November when an international convention of police chiefs comes to Los Angeles, she said.

While getting a boost from trade shows, the Santa Monica visitors bureau will continue to focus its marketing efforts on the lucrative long-haul international visitor.

"The most exciting thing we are in the process of ‘doing’ is a branding program for the destination,” Kerns said. “The branding question is: What is the promise we offer those who visit Santa Monica?” Various stake holders in the community will be involved in the process, she said.

In another move, the visitors bureau will launch an information and retail cart as a pilot program on the Third Street Promenade in mid-June.