Hotel Occupancy On The Rise; Facilities ‘Reposition’ With New Renovations
By Sean Belk - Staff Writer
June 19, 2012 - The hospitality and tourism industry in Long Beach will continue to see more positive signs of recovery this year, although growth might not be as pronounced as in 2011, according to industry experts and the latest statistics.
Los Angeles-based Colliers PKF Consulting projects Long Beach will see an overall 6.5 percent increase this year in RevPAR (revenue per available room) – an industry term used to gauge overall profits after factoring hotel occupancy and average daily room rates.
The upswing is expected to be smaller than the near 12 percent jump in RevPAR experienced last year, mainly because the market has firmed up in a competitive climate and continues to be strained by ongoing national and global economic factors, according to experts. But the industry is still rebounding from the sharp declines seen in 2008 and 2009, said Bruce Baltin, senior vice president for Colliers PKF Consulting.
“The overall L.A. and Long Beach markets are continuing to be relatively healthy and are continuing to grow,” he said. “Hotel occupancy is up and the market is up, which is pretty good . . . The hospitality industry has been one of the leading sectors in terms of economic growth in the last few years.”
In Long Beach, major upgrades to facilities and attractions, along with aggressive marketing tactics, have helped boost demand for short-term convention business, while corporate travelers have come back to the market as well. As a result, hotel occupancy has continued to improve in the first quarter of the year, Baltin said. “Long Beach is still a pretty solid destination,” he added.
Southern California in general has weathered the economic storm well and has maintained its position as a “strong tourist destination” over competing regions of the country, Baltin said. With the ability to provide an affordable competitive edge, the local area continues to be a major draw for both regional and international leisure travelers. In addition, newly renovated attractions are being marketed toward area residents, who are opting to save money by taking vacations locally instead of traveling abroad, he said.
Kimberly Ritter-Martinez, associate economist for the Los Angeles County Economic Development Corporation’s Kyser Center for Economic Research, said Los Angeles County saw 26.9 million visitors last year, which was a “record year” for the county, representing a 4.2 percent increase over 2010. Overall, tourists visiting the county spent close to $15.2 billion last year, she said.
While a majority of visitors come from nearby regions or other states, approximately 22 percent of all visitors to Los Angeles County last year were international tourists, traveling for both leisure and business purposes, according to Ritter-Martinez. She said international visitors typically spend more than domestic travelers. Last year, the largest number of international travelers to the county came from France, China, Germany, the UK, Australia and Japan.
In many ways, international travelers are considered a major “export” for the country, Ritter-Martinez added. “Most people don’t think of people coming from overseas as an export, but they are exchanging their money for dollars so it does contribute to our trade balance in a positive way,” she said.
How many of those international visitors came to Long Beach is unknown, but the Queen Mary remains a top destination for foreign guests.
Through April of this year, the tourism and hospitality industry across Los Angeles County provided for more than 392,000 jobs, a 1.8 percent gain in employment over the same time period last year, according to statistics from the California Employment Development Department.
But there are still “risks” that may slow growth this year, Ritter-Martinez cautioned. She said unemployment across the United States remains high. In addition, economic unrest persists in the Eurozone and production in emerging countries has slowed this year.
“What will hurt us this year – [in addition to] the high unemployment rate and the uncertainties here at home – will be the troubles in Europe and slower growth from the emerging economies,” Ritter-Martinez said. In addition, any increase in the value of the U.S. dollar would cause domestic goods to be more expensive for foreign visitors.
At the same time, however, she said recent renovations to attractions and hotels across Los Angeles County might help spur more demand. While businesses are still cautious about spending on trips, corporate travel is slowly improving. Ritter-Martinez said the local entertainment industry and cultural venues also continue to be a major draw for international tourists.
“Los Angeles is becoming more of a popular convention destination,” she said. “The theme parks around the area have also done a lot in terms of adding new attractions and there’s still more in the works . . . All of that is still a big draw for people… I think the overall numbers will be up, but we’re not going to see the huge surge that we saw in 2011.”
Conventions, Meetings And Events
Although the overall hospitality and tourism industry continues to rebound from the recession, businesses and associations are still booking conventions and meetings on a more “short-term” basis, meaning scheduled for a shorter time frame and not as far in advance.
Iris Himert, senior vice president of sales for the Long Beach Convention & Visitors Bureau (CVB), said longer-term bookings may be on the horizon, but most clients that took a hit during the recession remain hesitant to sign on to any big deals just yet.
She said about 70 percent of convention business is now typically booked within an 18-month window. Additionally, some organizations are “under-blocking,” or ordering fewer room night stays than in the past due to attrition and cost-cutting measures. This has helped fill occupancy at shouldering hotels across the city, but has negatively impacted the CVB’s business, which is primarily based on hotel room night blocks, Himert said.
On the bright side, short-term business has filled open dates. She expects the trend for longer-term bookings to slowly return in the next year, since the market has little new supply of inventory and should see a continued increase in business opportunities, hotel occupancy and room rates.
“What I’m seeing is that the slow trend of booking future conventions will continue to strengthen,” Himert said. “The outlook for the convention industry, I think, is very positive because the supply and demand is definitely in our favor . . . I’m feeling very confident that we’re going in the right direction.”
This year, a wide variety of conventions and business meetings have been booked for the Long Beach Convention & Entertainment Center. The Pro Walk/Pro Bike conference, expected to attract more than 1,000 cycling and transportation enthusiasts, generating close to $2 million in economic impact, is taking place at the convention center from September 10 to 13. The California Women’s Conference, which took over the California Governor & First Lady’s Conference On Women that was cancelled last year, is coming to the convention center on September 23 to 24. Long Beach is also hosting the Gay & Lesbian Institute’s annual LGBT Leaders 2012 Conference from November 29 to December 2, expected to draw more than 1,000 people from around the world.
Other organizations that have booked thousands of room night stays for conventions and business meetings this year include: the American Association of Petroleum Geologists; the Association for Molecular Pathology; Herbalife International Communications, Inc.; the National Emergency Number Association; and the California Association of Counties. One of the biggest conventions is the annual TED Conference, which typically draws more than 6,500 room nights per year.
During a sales mission in Washington, D.C. this month, Steve Goodling, the Long Beach CVB’s president and CEO, said various trade organizations and associations are starting to catch on to what Long Beach has to offer. The mission involved a delegation of about 19 local industry leaders who were able to visit with 300 national customers, he said.
Extensive redevelopment efforts in downtown and across the city in recent years have helped improve perceptions of the city and have now spurred competition with nearby locations, such as Anaheim in Orange County, Goodling said. One client called Long Beach an “undiscovered jewel,” he said.
“The feedback that we’ve received from the major association headquarters market . . . is that people are actually seeing Long Beach as an area that they need to consider and they are beginning to consider,” Goodling said. “It’s been fun to hear the responses from the clients . . . They’re excited with what’s happening in the city.”
Michelle Manire, president of CTC Destination Event Planning, a Long Beach-based event management company, said today’s clients are still watching their pocketbooks. But she noted that having hotels, arts venues, entertainment and restaurants all in one spot in the downtown area makes the city a more affordable and attractive destination to book meetings and events.
“There’s a lot to do for people coming into the Long Beach area,” Manire said. “We’ve got fabulous museums, a variety of entertainment venues and different restaurants . . . It’s a beautiful city right on the water.”
She said new attractions and exhibits, along with a newly launched public space area at The Pike at Rainbow Harbor, have made it easier to attract new clients. She said the event management company offers discounts at 200 area merchants and up to 20 professional services to public and private sector groups of up to 10,000 people.
Even though recovery has been slow, Manire said business meetings and conventions are still imperative for economic growth. “It’s been proven that the best way to do business is face to face, so I don’t think our industry is going away anytime soon,” she said.
‘Repositioning’ Long Beach
Meanwhile, the Long Beach Convention & Entertainment Center is continuing a $20 million renovation project that started nearly three years ago as a way to “reposition” the center as a new contemporary model, according to CVB officials. Renovations have included: enhanced lobbies, meeting rooms and hallway areas; and new “seating pods,” restrooms, outside lighting and landscaping.
After replacing 3,000 seats in the Terrace Theater, Pennsylvania-based management company SMG, which operates the convention center, is now working on launching a $6.5 million project to revamp the Long Beach Arena with a “loft-style” ballroom, creating 45,000 square feet of event space. Charlie Beirne, the convention center’s general manager, said the two-phase project is currently undergoing conceptual designs and the overall project should be completed by January 2013.
The first phase is being paid for by $5 million in tidelands funds and allocation has already been approved by the Long Beach City Council. The second phase, which will cost $1.5 million, will include installing the rigging truss system, the curtain and new lighting and audio-visual equipment, Beirne said.
The new ballroom space will be formed by having electronically operated curtains drop from the ceiling, enclosing the floor area and covering views of the upper deck seating. This is expected to provide an intimate environment for dinners, banquets, conventions and concerts, with seating for up to 5,500 people, doubling the convention center’s current ballroom capacity.
Himert said conventioneers and business groups have already shown widespread interest in the new ballroom, which will be a welcomed improvement for clients. “People don’t want to have their fancy, closing banquet in a hall, because it costs so much money to decorate and make it look attractive,” she said. “Having this as an option to sell is just incredibly exciting for all our staff.”
Beirne said the new facilities are being designed to allow for other events, such as Disney On Ice, to continue to utilize the entire arena space. Shows this year will be worked around construction schedules, he said. Beirne also said the new ballroom should increase the convention center’s marketability. “This is going to give our clients a better product to use at a lesser cost, because the lighting and audio will already be part of what we have here,” he said.
Other new attractions at the convention center include offering a new “pre-concert event lounge” in front of the Terrace Theater. In addition, SAVOR, the management company’s food and beverage concessionaire, is expected to offer new catering options upstairs with a completely redone café and restaurant, he said. Overall, Beirne said bookings for convention center venues should continue to pick up in 2013. “We’re looking for a slight uptick for next year,” he said. “I think it’s all positive.”
Across town, efforts are underway to also market the more than $140 million modernization of the Long Beach Airport as a way to increase tourism. A $45 million new passenger concourse will include a 34,750-square-foot boarding lounge with improved seating; new concessions with local eateries and restrooms; an atrium; a garden walkway and a new parking structure.
Airport Director Mario Rodriguez, who attended the CVB’s sales mission this year in D.C., said various aviation-related trade organizations, including the American Association of Airport Executives, have shown interest in booking conventions in Long Beach. The airport, which maintains the second lowest airfares in California, generates an economic impact of about $6 billion and about 18,000 direct jobs, he said.
To be completed by year’s end or early next year, the new passenger concourse is expected to offer a resort-style setting with fire pits and natural lighting, in addition to “boutique-style” offerings and convenience for commercial airline travelers, he said. “We’ve taken the cue from everybody in the community . . . We’ve taken the look and feel of Long Beach and put it inside the terminal,” Rodriguez said.
Hotel Occupancy Projected To Rise 4.5 Percent In 2012
After steady improvement in occupancy last year, growth in leisure and business travel continues to fill up room night stays at hotels across Long Beach this year. The projected increase in hotel revenue in 2012 should provide for an extra $1.1 million in hotel bed tax, also known as transient occupancy tax, which is shared between the CVB’s dedicated advertising and promotions fund and the city’s general fund.
According to PKF Consulting, the overall occupancy rate for hotels in Long Beach was 70.6 percent during the first quarter this year. PKF projects hotel occupancy to increase by 4.5 percent in 2012 over last year and average daily room rates in Long Beach to increase by 5 percent. However, Himert said it might take longer for some hotels to be able to raise room rates in today’s continued economic malaise.
To maintain a competitive edge, however, many hotels have invested in major renovations. In Long Beach, three hotels – the 528-room Hyatt Regency and the 469-room Westin, both located downtown, along with the 311-room Long Beach Marriott near the airport – have invested a combined $55 million in upgrades.
Out of the Hyatt Regency’s $30 million renovations, the hotel has so far completed the remodeling of guest rooms, suites and corridors, while adding new carpeting, wall coverings, window treatments and floor-to-ceiling upgrades. Stephen D’Agostino, the hotel’s general manager, said the Hyatt brand, which acquired a 138-room boutique hotel – formerly known as the AVIA, now called Hyatt The Pike Long Beach – last year, has made a business decision to invest in Long Beach, which the company considers “a destination that’s growing up and has much potential.”
At the Hyatt Regency, work is currently underway to enlarge the hotel’s pool deck to accommodate larger receptions. By November, the hotel plans to renovate meeting space, the lobby and the front driveway. He said the entire renovation should be completed by 2014. “By the time we’re done, it will be an entirely new hotel,” D’Agostino said. “And we’re coming out of all of this with the right timing . . . It’s nice to have a new product when people are starting to spend money and book business again.”
In addition, he said more and more conventioneers and businesses are starting to look at Long Beach as the place to book meetings and conventions. “There seems to be this sense of excitement out there that I haven’t felt in a couple years now,” D’Agostino said.
Across the harbor, the 199-room Hotel Maya-a DoubleTree by Hilton has continued its own renovations, recently finishing the construction of a 6,000-square-foot beach area, which now has fire pits, cabanas, hammocks and seating areas.
The resort-style hotel, which has added five new guest rooms and a new fitness center, while boasting its own restaurant, has seen steady demand from international tourists and locals looking for a weekend on the waterfront, said Kristi Allen, the hotel’s general manager.
Overall, the hotel industry in Long Beach continues to see steady growth in occupancy and hotel room rates, she said. “This year is going to be strong,” Allen said. “We’re sold-out for several weekends already going into the summer, which is a very good sign . . . Hotel rates and occupancy are definitely going up in Long Beach.”
Downtown And On The Waterfront
Walkways, restaurants and public transportation systems in downtown and on the waterfront are also seeing steady foot traffic compared to recession years, according to local representatives. Long Beach Transit, for instance, has seen a year-over-year increase in ridership of the transit agency’s Passport bus service, which remains a major selling point for conventioneers and tourists downtown.
By August, the downtown C Route, which takes passengers from Alamitos Avenue to 8th Street to Long Beach Boulevard, the Aquarium of the Pacific and the Queen Mary, will be the only bus service offering free rides. All other Passport routes will be phased into regular fixed routes as Long Beach Transit switches out old diesel buses with 64 new compressed natural gas coaches. The downtown route currently represents about 50 percent of the existing Passport service.
Overall, the Passport service is projected to see a ridership of 3 million passengers this year, representing a 5 percent increase over last year. “We’re increasing every year,” said Marcelle Epley, Long Beach Transit’s chief administrative officer and senior vice president. “Anywhere you go in downtown you can hop on a free shuttle bus that can take you to all the area’s popular restaurants and entertainment.”
Long Beach Transit has also seen a steady increase in ridership of the 75-seat Aqualink, which costs $5 for trips from Shoreline Village to the Queen Mary, the Aquarium and other destinations, and the 37-seat Aquabus, which costs only $1 for a shorter distance.
Both vessel services last year saw a combined 30,000 passengers, which represents about a 14 percent increase over 2010, Epley said. She said the larger Aqualink service, which now has a new express vessel and a new stop at the Belmont Pier, by far is the most popular boat ride. “The boats are full,” Epley said. “It’s an affordable, fun way for residents, tourists and conventioneers to use public transportation on the water.”
Meanwhile, the majority of Shoreline Village business tenants are showing an increase in gross sales this year over 2011, said the tourist destination’s General Manager Maureen Baker. In addition, she said various restaurants have also invested in renovations, including Parkers’ Lighthouse, which completed a remodel and opened up a third floor, now called the “Queen’s View Steakhouse.” Nearby, the Yard House restaurant is planning renovations as well, she said. Also, Segways will be available for rental this summer through Wheel Fun Rentals, Baker added.
John Sangmeister, managing partner of Gladstone’s seafood restaurant, said sales volumes and customer counts are increasing so far this year over 2011. However, he noted, sales are still down from pre-recession years. The restaurant, which opened eight years ago off the boardwalk, recently remodeled its patio.
The Pike and Shoreline Village, now offering improved parking conditions, remain prime locations for visitors to enjoy dining overlooking the harbor, he said. Sangmeister added that Gladstone’s is a major draw for regional customers from Orange County, while convention business accounts for about 35 percent of guest traffic. “We are very fortunate to be in our location,” he said. “I like to say we are long on Long Beach and love being here.”
Aquarium: New Exhibits And Expansion
Nearby, the Aquarium of the Pacific, which has been one of Long Beach’s major attractions for 14 years, continues to add an array of new exhibits and programs, while continuing with its plans to transform the facilities.
Last month, the Aquarium opened its latest permanent new exhibit: the June Keyes Penguin Habitat, which features a colony of 15 Magellanic penguins, many of which were rescued near Rio de Janeiro. The habitat features educational exhibit panels and interactive touch screens where visitors can learn about penguins and issues that are impacting their survival.
The new exhibit comes after the Aquarium last year launched “Arctic & Antarctic: Our Polar Regions In Peril,” which focuses on educating the public about climate change, featuring an Arctic fox, Alaskan king crabs, northern anchovies and an interactive touch tank of moon jellies.
Jerry Schubel, president and CEO of the Aquarium, said ticket sales this year are up 3 percent over the same time period in 2011, in large part due to the new exhibits that have attracted new visitors. He said he expects there to be 1.5 million visitors to the Aquarium by the end of the year. “We have some exciting new things and people are spending a little more money this year than they did last year,” Schubel said. “Every year more people hear about us and learn that it’s a great experience.”
The Aquarium is also moving along with its $50 million expansion project. After constructing the 2,500-square-foot watershed exhibit and the new Molina Animal Care Center, last year the Aquarium rolled out the Ocean Science Center gallery, which features a new technology-based multimedia exhibit called “Science On a Sphere.”
By early September, the Aquarium will break ground on a project to expand the front entrance and retail store, Schubel said. The rest of the expansion is expected to involve constructing a two-story addition called “Pacific Visions,” with changing galleries and a more than 300-seat, 4-D theater, he said.
The Aquarium is also focused on integrating science with the arts, Schubel added, with ocean-themed performances by the Long Beach Opera and Long Beach Ballet scheduled for later this year, along with art programs for children.
Cruisin’ For A Vacation
Also unique to Long Beach are various boat rides, ferry services, cruises and vessel operators that allow visitors to take advantage of the harbor and the Pacific Ocean.
One of the largest economic engines for the local region is the Long Beach Cruise Terminal, which allows visitors to board ships adjacent to the Queen Mary, and generates millions of dollars per year in direct economic benefit to the region.
This year, Carnival Cruise Lines has two ships operating from the terminal, including the 2,052-passenger Carnival Inspiration, which sails three-day cruises to Ensenada, departing on Fridays, and four-day cruises to Ensenada and Catalina Island, departing on Mondays, and the 3,006-passenger Carnival Splendor, which operates seven-day cruises to the Mexican Riviera, departing on Sundays.
In 2013, however, the cruise line is repositioning the Carnival Miracle to Long Beach, replacing the Splendor. Miracle will operate cruises to Hawaii and the Mexican Riviera, according to a statement by Terry Thornton, senior vice president of revenue management and deployment for Carnival Cruise Lines. Thornton added that the cruise line will maintain a seasonal seven-day program for Miracle cruises.
In addition, the Carnival Inspiration will continue to operate year-round three- and four-day cruises from Long Beach to Ensenada and Catalina Island. “These popular cruises offer an exceptional value compared to land-based vacations,” Thornton said.
Carnival, according to Thornton, continues to run West Coast ships at 100 percent stateroom occupancy, carrying approximately 390,000 passengers from Long Beach last year, which was relatively the same as the previous year. However, he noted that economic issues in the western region of the U.S. and ongoing consumer concerns about incidents in Western Mexico have posed significant challenges for the cruise line.
“The pricing for West Coast cruises has been depressed for several years,” he said. “The crime situation in Mexico has been the most significant obstacle to driving better levels of demand and pricing. We were hoping to see some pricing ‘rebound’ this year, but we have not been able to achieve this.”
Meanwhile, Catalina Express, which also operates out of the harbor, is extending its promotion launched last year in celebration of the ferry service’s 30th anniversary, offering passengers a free ride to Catalina Island on their birthday. Elaine Vaughan, vice president of sales and marketing, said the promotion has been “wildly successful.” The promotion now continues through April 30, 2013. She said the promotion has been expanded to include discounts at businesses on the island as well. To sign up for the promotion, visit www.catalinaexpress.com.
New attractions are also offered on the island this year. The Santa Catalina Island Company, which recently invested millions of dollars in renovating facilities, including creating resort-style accommodations at Descanso Beach in Avalon, continues to offer different activities, including a new night zip-line and, more recently, a five-hour “land and sea” adventure tour that takes visitors on an inflatable vessel and then on a Hummer to various hidden parts of the island.
Harbor Breeze Cruises, which operates out of Long Beach’s Rainbow Harbor, is also expanding its services, now offering: sight-seeing excursions, including gray and blue whale-watching trips; day- and night-time cruises around the harbor; and tours of the ports of Long Beach and Los Angeles. The cruise service now operates a fleet of six vessels, including a newly added 90-foot boat.
Dan Salas, owner of the cruise service, said ticket sales and ridership have increased 15 percent this year over 2011, with business increasing almost every year since starting more than a decade ago. Recently, he said repeat business has come from regional visitors looking for a weekend getaway excursion in Long Beach.
Salas said the city has improved its reputation as a worthwhile destination in the last few years. “We’re starting to get repeat customers,” he said. “We’re not having to spend so much energy, revenue and time on marketing Long Beach as an alternative destination . . . Long Beach is finally becoming a destination on its own . . . and more and more people are starting to enjoy the waterfront.”
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