Record number of hotel rooms opened in California in the first half of 2017 – Orange County Register
The number of new hotels opened in California increased by 53% in the first half of 2017 and there were 15% more hotels in development and 6% more under construction compared to the same period in 2016, according to a study by ‘Atlas Hospitality Group.
“This is a record number of hotel rooms opened in the first six months of the year,” said Alan Reay, president of Irvine-based Atlas.
Twenty-six hotels, with 4,730 rooms, opened in the first half of 2017 compared to 17 hotels in the same period of 2016.
Reay said that many hotels are under construction now because the purchase and renovation price of older hotels is high, it is more attractive to build a new hotel, than construction finance and loans. are readily available and that there have been six years of increased revenue.
In Orange County, three 461-room hotels opened in the first half of the year. They were:
AC Irvine Hotel: The 176-room hotel in the Park Place development opened this spring.
It is less than two miles from John Wayne Airport.
It has a swimming pool, a fitness center and three meeting spaces.
A subsidiary of Pacific Hospitality Group, based in Irvine, owns the property. PHG manages the hotel.
AC is a Marriott brand.
Homewood Suites by Hilton Irvine John Wayne Airport: The 161-room hotel opened this winter. It offers studios, one and two bedroom suites. Each has a fully equipped kitchen.
The hotel has a gym, swimming pool, business center and meeting rooms.
The project was Irvine-based RD Olson Construction’s first partnership with Irvine-based hotel management and development company DKN Hotels.
Staybridge Suites Anaheim at the park: The 124-room hotel opened earlier this year. This is a hotel consisting of suites only. The suites have full kitchens.
The hotel is near Disneyland Resort.
It has a business center, fitness center and swimming pool.
Orange County currently has eight hotels with 1,194 rooms under construction. The largest is the Marriott Irvine Spectrum, which will have 271 rooms.
The county has 50 hotels in the pipeline, a 47% increase from the number forecast at the same time last year. The 50 hotels will translate to 10,474 new rooms, a 55% increase over the number forecast a year ago.
Orange County had 58,723 hotel rooms at the end of 2016, according to Visit Anaheim.
The larger hotels in the pipeline are a 600-room Nickelodeon resort in Garden Grove, a 466-room JW Marriott in GardenWalk, and a 700-room luxury resort near Disneyland.
According to a report by CBRE Hotels, hotel occupancy rates in the first three months of 2017 decreased by 0.7%. The average daily rate, however, increased 2.2 percent, resulting in an increase in revenue per available room of 1.5 percent.
The concern of some is that all development is going to change that.
“The oversupply is always a concern,” Reay said. “One of the big problems we have is that when we are doing well, people add more rooms and create oversupply. If the economy continues to grow, what we are seeing is that the properties that have opened and are under construction will be absorbed. The problem arises if we always put this amount of inventory on the market in 20 and 21. “
He added that it would be the older hotels that have not been renovated that are in difficulty. Some of these properties would likely be sold for other uses.