Westside hotels outperform rest of sagging Los Angeles County.

Westside hotels outperform rest of sagging Los Angeles County

While the hotel industry in most of greater Los Angeles continues to struggle against one of its worst slumps ever, hotels on the Westside have started to rebound, with occupancy rates considerably higher than properties outside

The fact that Westside hotels are doing better than properties in the rest of the city does not surprise industry experts.

"It's a pretty safe generalization in the business that the premiere and more high-priced properties can weather a recession better than the middle segment that is forced to be more price sensitive in order to survive," said Michael Collins, vice president of public affairs at the Los Angeles Convention & Visitors Bureau.

"They (the mid-range hotels) are much more price sensitive because it's the middle-range hotel whose clients are more affected and buffeted by an economic downturn," he said.

Hotels on the Westside include properties in Century City, Beverly Hills and Santa Monica, areas which cater to either high-powered executives or well-heeled leisure travelers. Hotels in other areas of Los Angeles County tend to attract mid-level business travelers or budget-minded vacationers.

According to Pannell Kerr Forster, a national accounting and consulting firm, hotel room occupancy throughout Los Angeles County was 62 percent from January through April, but in Santa Monica it was 71 percent and in the Beverly Hills-Westwood area it was 65 percent.

Hotel room occupancy is the key barometer for gauging the industry's economic health. A 70 percent hotel occupancy rate is considered good and is higher than the national average of about 65 percent.

Bruce Baltin, a partner and hotel industry expert in the firm's Los Angeles office, said, "L.A. County as a whole is down six percentage points from last year. The Westside is only down 1 percent."

Baltin and others said another reason for Westside hotels' relative prosperity is that the entertainment industry -- a Westside mainstay -- has escaped much of the negative effects of the current recession.

"One of the reasons the hotels here have done better than properties in other areas like downtown is that the businesses here have not been hurt by the economy," said Norma Tomkinson, director of marketing at the JW Marriott Hotel on Avenue of the Stars in Century City. "A lot of our business, and that of other hotels around here, is tied to the entertainment industry, which has held up pretty good during the recession. Other businesses have been hurt and those businesses are located in places like downtown or by defense contractors, for instance."

Hotel occupancy in downtown Los Angeles has been dropping for the past 18 months and is now hovering around the 50 percent mark. Downtown occupancy is generally the lowest of any region in Los Angeles County, according to a monthly survey done by Pannell Kerr Forster.

Some downtown hotels have laid off workers because of the drop in business, but properties on the Westside have not been forced to take similar action, hotel officials said.

Several new hotels are planned, under construction or were recently opened on the Westside of Los Angeles County. Among the new hotels are a planned resort property in Malibu and two hotels in Beverly Hills, the Nikko Beverly Hills and the Peninsula; the latter is scheduled to open in August after about 10 years of planning.

Another planned hotel, the Park Hyatt on the beach in Santa Monica, is facing indefinite delays, however. The property, where nightly room rates will range from $275 to $395, was supposed to have opened last year and then this September. Now, the developer, Sam Stein of Encino, is not sure when the hotel will open.

The manager of the hotel, Monica Neumann, said the delays have been caused by disputes with the original general contractor. She said the matter is now in litigation and a new general contractor has been hired.

Among the newly opened Westside hotels is the Ritz-Carlton in Marina del Rey.

A third reason for Westside hotels' success is that they attract leisure travelers more than other Los Angeles hotels, except those near major attractions like Universal Studios Hollywood.

"Hotels on the Westside are doing better than other areas and one of the reasons is that they are starting to pick up summer travel from people who want to be near the beach," said Les Benson, president and treasurer of the Los Angeles County Hotel and Motel Association.

He said high-priced hotels like those found on the Westside generally have a more loyal following than those that attract more budget-minded travelers.

"Hotels like those in Beverly Hills have a name and a following, which makes it easier for them to keep up their business in hard times," he said.

But some Westside hotels have not sat still during the recession.

The Century Plaza Hotel & Tower is re-landscaping its grounds, re-training its staff and "re-themeing its restaurants so we will be ready for the next recession," said spokeswoman Katie Meyer.

"We have a new managing director, Bernard Agache, who believes in service and quality. We have had our peaks and valleys during the recession but it's important to maintain service during times like this."

Westside hotels, even though they have been doing better than properties in other parts of the county, anticipate still higher occupancy rates starting in 1993 when the expansion of the Los Angeles Convention Center is completed.

"Hotels there will benefit because of what is known as the |push-out' effect. Hotels downtown will get the first wave but business will push out to other areas after that," said Collins of the convention bureau.

PHOTO : Visitors like to be near the beaches: Loews in Santa Monica