Occupancy Rates

Office occupancy rates in the United States and Canada have fallen to 81.8% at mid-year from 83.1% a year ago, a building owners association said today. The mid-year survey by the Building Owners and Managers Assn. International also showed an increase in suburban occupancy rates, apparently at the expense of downtown office markets. The association's North American office market review reported an 0.9% decline in downtown occupancy rates to 84.9%, while suburban occupancy rates gained 0.

It was another stale quarter for most Southern California office landlords as rents and occupancy remained stalled at low levels, except in neighborhoods favored by technology and digital media companies. The soft market was a boon for tenants willing to sign leases. But few companies are finding the need to expand their quarters with the economy tepid and hiring at a standstill. Business bosses "have gone on a personnel diet," said Jim Kruse of CBRE Group Inc., the real estate brokerage formerly known as CB Richard Ellis.

California--which currently leads the nation in hotel occupancy rates--is likely to lose that edge as a hotel building boom continues, according to a study scheduled to be released next week. Hotels in the state were 69% full in 1984, and even though an estimated 14,600 new rooms will open throughout the state, the rate will stay about the same this year, according to the report by Pannell Kerr Forster, a Los Angeles accounting firm that specializes in the hospitality industry.

Trying to promote a Vegas hotel? That's heavy, man. Or more correctly, the Heavy ? a British rock band whose TV commercial featuring Aria, the 4,004-room anchor hotel at CityCenter ? is coming soon to a TV screen near you. "It's a high-energy, fun commercial that we think accurately displays the excitement of Aria," said Jim Murren, chief executive of parent company MGM Resorts International. Here's what's behind the commercial: Fewer than half of Southern Californians ?

Orange County hotels received a double dose of good news in November as occupancy rates and average room prices both rose compared to a year earlier, according to figures released Thursday. Overall, the average occupancy rate in the county was 57.1%, up slightly from 56.7% in November, 1990. The average nightly room rate at county hotels was $73.26, up 4.3% from $70.20 the previous year, according to the accounting firm of Pannell Kerr Forster in Irvine.

Yes, there is room at the inn. Hotels in the Anaheim area had the highest occupancy levels in the county through the third quarter of the year, at 77.3%. But in the John Wayne Airport area and Newport Beach only 66.5% of the hotel rooms were occupied this year. That's according to Pannell Kerr Forster, an accounting firm and hotel consultant with an office in Newport Beach. The company also looked at hotels in the north Orange County area, which ran a 70.

Comprehensive Care Corp., the once highly profitable chain of alcohol and drug treatment centers that has fallen on hard times, has closed a 103-bed hospital in Orange because of low occupancy rates. The closing of CareUnit Hospital of Orange last month follows the sale of CompCare's psychiatric hospital in Brea last year to Community Psychiatric Centers, a Laguna Hills-based psychiatric hospital chain. CompCare moved its corporate headquarters from Irvine to St. Louis in 1989.

Orange County's hotel industry staged an impressive recovery in May compared to the same month last year and it could prove to be a good omen for summer. Overall, hotel occupancy increased to 66.7% in May, the latest occupancy figures available, up 5.1% over 63.5% during the same month last year, according a monthly tally compiled by the Los Angeles firm PKF Consulting. Daily room rates increased a healthy 3.2% to an average of $78.40.

Hotel occupancy rates decreased nearly 5% in Orange County in the first four months of the year, and the market probably isn't going to get much better this year. A recent survey by Pannell Kerr Forster, a hotel consultant, found that occupancy rates in Orange County's big hotels dropped from 67.4% in the January-to-April period of 1989 to 64.2% for the same period this year.

Orange County hotels filled an average of 56.6% of their rooms in November, down from 59.9% in November, 1989, according to a recent report by the accounting firm Pannell Kerr Forster in Irvine. Average room rates increased 1.9% to $71.67 in November, up from $70.32 a year earlier. "I think it's a pretty obvious concern relative to the economy," Rick Schwartz, the firm's manager of consulting, said Monday. "It will be curious to see what (December figures) look like."

The "staycation" is so last year. Americans who plan to vacation this summer will spend more money and stay away longer than last year, when staying home was more the norm, according to a new survey released Monday. Although the percentage of Americans who will travel this summer has remained about the same (51%), of those who will hit the road, 67% will spend more money than they did a year earlier and 74% will take the same length of vacation or longer, according to a survey of 2,000 Americans commissioned by American Express Co. The survey findings, along with improving hotel occupancy rates and rising demand for airline seats, suggest Americans are loosening their purse strings somewhat on vacation spending, in contrast to the penny-pinching habits of travelers during the economic slump of the last year and a half.

While hotels across the country continue to struggle with slumping occupancy rates and sliding revenue, industry data released Tuesday show signs of improvement in several regions, including Southern California. The hotel occupancy rate nationwide dropped 5.4 percentage points to 59.8% in the first week of October, compared with the same period last year, while revenue per available room fell 12% to $59.28, according to Smith Travel Research Global, an industry research firm. The numbers are the latest in a series of reports chronicling one of the worst slumps in decades for the hotel industry.

Hawaii has suffered one of the worst winters for tourism in recent years and has appealed to the state's most famous native son -- President Obama -- to help turn its fortunes around. Hotel occupancy rates in the winter were the lowest in at least five years, and in February -- traditionally the state's busiest month -- the rate dropped to 75%. That was the lowest level since 1991, during the Persian Gulf War, when it fell to 69.7%, according to Smith Travel Research.

When Riverside County landlord Eloise Figueroa learned that her tenant was about to move out of her four-bedroom home in Perris and into a lower-priced rental house, she sprang into action. "I said, 'Where are you going? What are you paying? OK. That's your new rent,' " said Figueroa, who agreed to cut her renter's $3,000 monthly lease by $150 to keep him.

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.

Tourists have been flocking here all summer, plunking down credit cards to cover rising room prices and filling hotels at the highest rate since 9/11 and the dot-com bust. But for the second time in two years, the city is bracing for a potential strike at 13 of its largest hotels that could cost millions in tourism dollars.

For the last four years, Cal State Northridge officials have been rushing to build new campus housing facilities to meet a growing demand. But now, with the number of available spaces increased fivefold, many of the beds remain empty. After years of occupancy rates topping 90%, the rate dropped this fall to about 75%.

Hotels across California--particularly convention and business properties in Anaheim and San Francisco--suffered the lowest occupancy rates in a decade in the aftermath of the mid-September terrorist attacks, according to a survey released Monday. Occupancy rates in both San Francisco and Anaheim plunged by about half compared with last year's levels to about 42% for the week ended Sept. 22, according to an analysis by Ernst & Young Hospitality Group.

In certain corners of this city, last month's same-sex wedding bells had a nice echo: ka-ching! The Handlery Union Square Hotel counted more than 80 walk-ins on the first weekend the marriages were offered. Reservations for several wedding parties of 30 had been booked at Max's Opera Cafe by the time the marriages had been halted. "We had about a 10% bump in business," said Andrew Freeman, a spokesman for the Kimpton Hotels & Restaurants Group, which has 13 boutique hotels in the city.

Arden Realty Inc., a Los Angeles real estate investment trust, said Tuesday that profit fell 28% in the first quarter as most of the nation's office markets remained flat or soft. Arden, the largest publicly owned office landlord in Southern California with 19.3 million square feet, said profit dropped to $15.4 million, or 24 cents a share, in the three months ended March 31. A year earlier, profit was $21.4 million, or 33 cents a share. Revenue was $104.4 million, compared with $100.2 million.