The San Fernando Valley region’s hospitality industry continues to expand as tourists flock to the Los Angeles market in record numbers. To keep up with demand, existing hotels are making investments in technology and infrastructure, even as developers plan to add rooms in the market. Last year, Los Angeles welcomed an all-time high of 48.3 million visitors, according to the Los Angeles Tourism & Convention Board. The total occupancy rate for hotels in the Valley was close to 80 percent, according to the organization. That’s well above the national rate, which has hovered around 65 percent in recent years. The region is on pace to hit a similar occupancy number this year. “Downtown L.A. and the core markets of the L.A. metro area are at such a high occupancy that they are creating a compression, so every other submarket (including the Valley) is benefiting as a result,” said Jeff Lugosi, managing director of hospitality consulting at real estate firm CBRE Inc. In addition to the overflow from L.A., movie studios and theme parks near Glendale, Burbank and Universal City as well as the Valley’s corporate offices are driving hotel traffic. “(These areas) are becoming their own individualized markets with business and leisure opportunities,” said Lugosi. Attractive amenities Hilton Universal City, the largest lodging on the Business Journal’s list of hotels, has benefited from the rising popularity of Universal Studios Hollywood, which the L.A. Tourism Board named as the county’s top attraction. General Manager Mark Davis said the park, along with new entertainment options in Hollywood and downtown L.A., has made the Hilton a year-round destination. “We don’t have as much seasonality as we used to,” he said. “Last year, we filled an average of 94 percent of our rooms, so there are very few days when we aren’t busting at the seams.” It’s not just leisure travel that keeps the occupancy rates up. Davis said that corporate events at the hotel’s 16,000-square-foot ballroom make up a quarter of its business and that it is struggling to keep up with demand. Meeting and group spaces are becoming increasingly important to hotels throughout the region as the Valley’s economy outlook remains strong. To expand both its leisure and travel accommodations, Hilton plans to build a new 15-story, 365-room wing budgeted at $100 million. Developers are set to break ground on the project by 2020. The hotel has also undergone extensive interior and exterior overhauls. “We have spent the past three years completely renovating our hotel from top to bottom,” said Davis. Harnessing data has also become a priority for hotels in the Valley region. Russ Tanakaya, general manager of the Embassy Suites Glendale, No. 9 on the Business Journal’s list, said the chain is constantly seeking insights from customers to better inform its decision making. “We have an incredible guest feedback mechanism called SALT and they do thousands of surveys,” he said. “We look at that to see what type of things our customers are looking for.” One of those things is better Wi-Fi service. “Today, every kid has an iPhone and iPad and the demands on high speed (internet) as an amenity are incredibly higher than they were just 10 years ago,” said Tanakaya. In addition to faster internet, hotels chains are introducing new customer-facing tech including mobile booking, digital check-in, room service apps and text updates. Tanakaya said the goal is to meet guests’ increasing expectations of on-demand convenience. Lugosi, at CBRE, said existing hotels need to revamp their accommodations and technology infrastructure to compete with new developments. “A lot of times what happens in these cycles is hotels expand and renovate to keep up with the Joneses next door,” he said. “And since they have lower fixed costs, it’s a very wise move.” New construction Three large hotel projects are planned for the Warner Center in Woodland Hills. A part of the Warner Center 2035 Plan, developers have proposed to build 272-room and 300-room hotels at Westfield Corp.’s Promenade. Another 228-room hotel is planned for the nearby Warner Center Corporate Park office campus as part of a larger proposed $1 billion development. Further out in the Santa Clarita Valley, a spate of new approved hotels will begin opening in 2019, according to the Santa Clarita Valley Economic Development Corp. They include a 200-suite Vista Canyon hotel; a 185-room Homewood Suites/Hampton Inn; 170-room Residence Inn/Springhill Suites; a 134-room Oliver Hotel; and Luxen, a 42-room boutique hotel in the heart of Old Town Newhall. The hospitality industry in Ventura County is also booming. A pair of Hiltons is under construction in Camarillo and two 100-plus room hotels are approved for Ventura, including a 156,160-square-foot development near the Ventura County Fairgrounds. The new hotels come as the county’s average year-to-date occupancy rate for February was up almost 8 percent to 72 percent overall, according to the Ventura County Lodging Association. The group’s executive director Brian Tucker said leisure travel is driving the expansion. “We have 22 miles of coastline and numerous outdoor adventure opportunities including direct access to the Channel Islands National Park through Oxnard and Ventura harbors,” he said. “Ventura County offers something for everyone.”
