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Newporter Resort Will Become a Hyatt, Undergo Renovation

June 27, 1989|MICHAEL FLAGG | Times Staff Writer

The Newporter Resort near Fashion Island in Newport Beach will become the Hyatt Newporter next month, the hotel chain said Monday.

Hyatt Hotels Corp. was one of the last major chains without a hotel to manage in the booming Costa Mesa/Newport Beach/Irvine area around John Wayne Airport.

Hyatt will replace Westgroup, a Los Angeles hotel management company, on July 16.

The hotel's owner, Columbia Savings & Loan Assn. in Beverly Hills, said it would spend more than $4 million over the next three years to refurbish the hotel.

A spokesman for the thrift said it switched to Hyatt because of the chain's "very strong national recognition."

Columbia may also have considered Hyatt's marketing expertise, hotel experts said, especially in attracting business meetings to Hyatt hotels. Local competition for the lucrative meetings business is intense.

The 410-room Newporter--at 1107 Jamboree Road--once had little competition in the local hotel market: Built in 1962 as a resort, for much of the 1960s it was the only upscale hotel in the Newport Beach area.

But by the time Columbia bought it for $26 million in 1985, the hotel had been sold several times and business had been falling off, Westgroup said in 1985 as it took over management of the hotel for Columbia.

The competition has only gotten stiffer since: In the last five years, the Newporter has had to square off against a pair of new oceanfront resorts: the Ritz-Carlton in Dana Point and the Dana Point Resort.

And developers have built a number of hotels for business travelers among the mid-rise office buildings in the Newport Beach/Costa Mesa/Irvine area. One reason: An adjacent hotel makes these developer's office buildings more attractive to tenants.

So intense is the competition for guests in those cities now that some surveys put the average hotel occupancy rate in the range of 65%, a little better than last year, but not much.

"It's going to take another year or two to get healthier," said Jim Burba, a consultant at accounting firm Pannell Kerr Forster's Newport Beach office.

With those kinds of numbers, it's unlikely that many new hotels will be built soon near the airport, experts say. Only one big hotel opened in the area last year; only one will open this year. Both are Marriott all-suite hotels. For Hyatt, that's one advantage of operating the Newporter: The chain can get a foothold in the market without waiting for a developer to build a new hotel.

Experts say developers planning new hotels in the area are probably also courting Hyatt, which has a reputation as one of the nation's better hotel chains. Some of them may yet get their wish: Once the latest wave of new hotels is filled up, the experts said, the airport market will probably be busy enough to accommodate another Hyatt.

Over the years the chain has talked to some of the county's biggest developers--the Irvine Co., Koll Co., Mola Development Co.--about managing their new hotels.

But so far, Hyatt has moved at a deliberate pace in Orange County. The chain operates only a hotel across the street from Disneyland in Anaheim and the Hyatt Regency Alicante in Garden Grove, which Hyatt took over in 1987 from the Princess hotel chain.

Altogether, Chicago-based Hyatt operates 23 hotels and resorts in California. It began in the state in 1957 with a hotel at Los Angeles International Airport.

The company says it remains interested in possible new opportunities in Orange County. A spokesman noted that when Hyatt opened an office to scout new deals on the West Coast about a year and a half ago, it put the office in Orange County.

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