1996 the Best Year in a Decade for County Hoteliers

Orange County hotels posted their best year in a decade in 1996 as business travelers and vacationers filled rooms at a pace not seen since the mid-1980s.

From January through December, visitors filled an average of 73.7% of area hotel rooms, the highest average yearly occupancy of the decade, according to statistics released Thursday by Los Angeles-based PKF Consulting. The previous high-water mark of the 1990s came in 1995, when occupancy averaged 70.3%

Industry watchers credit the healthy economy, record-breaking attendance at Disneyland and a lack of new hotel construction for the local industry’s stellar performance last year.

“It was a banner year in terms of occupancy,” said PKF’s Christo Chiotis. “The growth was very impressive.”

Anaheim, the county’s largest hotel market, led the way by averaging a sizzling 76.2% occupancy for the 12-month period, placing it among the nation’s hottest tourist destinations.

Fueling those numbers was the farewell season of Disneyland’s Main Street Electric Parade. The long goodbye helped the Anaheim park attract an estimated 15 million visitors in 1996, the park’s highest visitor tally ever.

“Disney’s marketing gave the area an incredible boost,” said PKF analyst Melissa Mills. “The impact was tremendous.”

Anaheim achieved its eye-popping 12-month average occupancy despite a lackluster December. The park averaged 57.9% occupancy last month, down from 59.4% in December 1995.

City hoteliers blamed the lousy weather and a dip in convention business for a sluggish end to a frenzied year. But December was rosy for hoteliers in other parts of the county.

Airport hotels reported average occupancy of 64.4% in December, up from 57.7% for the same month a year ago, thanks to a big jump in business from the Rose Bowl. The Westin South Coast Plaza hosted the Ohio State football team, while some of the Buckeye entourage set up camp at neighboring hotels.

“The Rose Bowl crowds drove up occupancy all around the airport in December,” said John Gilbert, general manager of the Westin. “It’s normally a slow time of year, so we were very fortunate.”

Although 1996 occupancy figures reminded O.C. hoteliers of the go-go ‘80s, the surge in demand has still not translated into significantly higher room rates.

In 1996, the average hotel room in Orange County was priced at $82.01, up only 3.4% from 1995, not much ahead of the rate of inflation.

Still, December increases provided a hint of things to come. The countywide average room rate reached $81.89 last month, up a healthy 7.6% over December 1995.

Bill O’Connell, partner and general manager of four Best Western Stovall’s Inns in Anaheim, said countywide room rates have been sluggish since the early ‘90s recession. He said strong demand has allowed many O.C. innkeepers to boost rates aggressively in the last half of the year, and he expects rates to keep increasing in 1997.

“There’s a lot of catch-up going on,” O’Connell said. “With the increase in prices, 1997 should prove to be a more profitable year than 1996.”

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Hotel Peaks

Although Orange County’s average daily hotel room rate rose to its highest level in five years during 1996, the occupancy rate also continued upward, also reaching a five-year high last year:

Average Daily Room Rate

1992: $77.03

1993: $77.80

1994: $75.36

1995: $79.32

1996: $82.01

****

Occupancy Rate

1992: 64.9%

1993: 66.0%

1994: 64.2%

1995: 70.3%

1996: 73.7%

Source: PKF Consulting