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California and the West

Visitors Flock to L.A., Region

Hotel occupancy rates and room prices are expected to stay high next year. Downtown enjoys strong growth.

October 13, 2006|Kimi Yoshino | Times Staff Writer

Downtown Los Angeles is enjoying a tourism renaissance as record crowds check into new sports and entertainment activities, while other unexpected areas -- Whittier, for one -- are reaping a growing crop of out-of-towners.

Overall, the Southern California visitor industry is flat and likely to stay that way next year because foreign tourists are going elsewhere and U.S. travelers are beginning to feel pinched by the slowing housing market. But stagnation isn't necessarily a bad thing, lodging forecasters said Thursday.

For the last two years, tourists have been paying record rates for rooms that are becoming increasingly harder to find in the 10 counties south of Kern County to the Mexico border, according to tourism experts at the 18th annual Southern California Visitor Industry Outlook Conference in Los Angeles.

"Flat used to be not so good," said Tiffany Urness, research manager of the California Division of Tourism. "But 'flatiness' this year is fine, just fine."

San Diego, with its strong convention business and revitalized downtown, remains a major player in the tourism market. Orange County also posted high numbers, thanks in part to Disneyland's 50th anniversary and its coastal resorts.

And Los Angeles County -- including surprising spots such as Whittier, Norwalk and the San Gabriel Valley -- has benefited from sold-out hotels in tourist-magnet locales such as Santa Monica and Hollywood.

Downtown L.A. hotels are seeing significant increases in occupancy because of renovated rooms and a renewed interest in staying downtown. The hotel occupancy rate downtown is expected to hit about 73% this year, compared with 50.8% in 2003.

"Downtown Los Angeles, over the last two years, absolutely has blown away our forecasts," said Bruce Baltin, senior vice president of PKF Consulting in Los Angeles. "There is a lot of energy in downtown."

Baltin described the coming years as uncharted waters for Southern California tourism, noting that growth was stagnant but at peak levels.

Hotel occupancy in the 10-county region is hovering just under 80% -- a level that has been marching steadily upward since the Sept 11 terror attacks. Although much of the growth can be attributed to an increase in travel, part of it stems from a tapering off in hotel development.

Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., said that the California economy, including the tourism sector, was moving onto a slower growth track.

"A lot is laid at the feet of what's going on in the housing market," he said, adding that as that market slows further, people may start saving more and spending less on travel.

The region's international tourism still hasn't fully rebounded to pre-9/11 levels. Many of those tourists are bypassing the U.S. or traveling to other parts of the nation, Urness said.

To bolster the industry, the state may spend as much as $50 million next year in marketing, compared with $8 million in years past, Urness said.

"This will not only allow us to compete domestically," she said, "but for the first time, compete on the international level."

kimi.yoshino@latimes.com

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