Valley Meeting and Convention Business on Up Swing

The meetings and convention business in the greater San Fernando Valley region is making a gradual comeback, but not as quickly as facility operators and managers would like. “We’re improving but not fast,” said Clay Andrews, general manager of the Warner Center Marriott in Woodland Hills, which has the seventh largest venue on the San Fernando Valley Business Journal’s “Valley’s Largest Meeting Facilities list. Help is finally on the way. With the passage of the Tourism Marketing District a year ago, the city now has a dedicated individual whose specific job is to promote the Valley’s meeting facilities. It’s the first such position at the Los Angeles Tourism & Convention Board, whose promotional budget was doubled to about $25 million this year due to the 1.5 percent hotel tax passed last year. “We now have the resources directly focused on supporting sales in the Valley,” said Michael Krouse, senior vice president, sales and client services at the Board. Theresa Ofstad, regional director of hotel sales in the San Fernando Valley, started in her job on May 31, Krouse said. The new tax on hotel guests has allowed Krouse to hire six new sales representatives to promote the meeting business in the greater Los Angeles region, four of them focused on the city’s sub-regions. It brings his sales staff to 11. Valley facility managers are sure to welcome the promotional support. Despite the recent uptick in business travel, selling meeting space in the Valley has been challenging, they say, with the Valley region’s growth trailing that of the downtown LA market. Sales of hotel rooms tied to meeting business were up 3 percent in the San Fernando Valley in the first five months of this year compared to the same year-ago period, Krouse said. The gain of about 2,000 room nights was healthy compared to the dismal turnout of the last few years. But it’s a fraction of the double digit gains made in the Downtown market. That region is gaining faster because of the convention business, which experienced its best year in 15 years, according to Krouse. The Valley’s 50 largest meeting facilities had a total of 730,126 square feet of indoor meeting space, the largest being The Ronald Reagan Presidential Library with 33,000 square feet of rentable space at the Air Force One Pavilion in Simi Valley. The spaces range in style and size from the Library’s exquisite glass-walled building housing Ronald Reagan’s Air Force One to the Antelope Valley Fairgrounds in Lancaster with its country flavor, ideal for the recently held meeting of the Livestock Council. The region’s meeting facilities can accommodate a range of events from business to social. Not all are run-of-the-mill hotel ballrooms. For example, the second largest facility on the list is Warner Bros.’ 32,130-square-foot Stage 16 in Burbank, where films from “My Fair Lady” to “Ghostbusters” and “Jurassic Park” were filmed. The space offer clients a true Hollywood experience. Such unique venues make competing for business slightly easier, said Hillary Harris, director of special events for Stage 16. “If you can do something a little different, it really does help to draw people in.” Hotels have faced more of a challenge filling their meeting space calendars. Andrews said bookings at the Warner Center Marriott are up about 10 percent over a year ago. A recent $4 million renovation has improved the property’s curb appeal, Andrews said, helping to lure more business to the hotel. But the improvements have not helped raise average daily rates as much as he’d like. PKF Consulting expects average daily room rates in the Valley to increase by 5.8 percent in 2013 while demand should increase slightly by 1.2 percent. Andrews says that among hotels, “competition is fierce.We’re all going after the business but there is only so much to go around.” Richard Reeves, director of sales and marketing at Sheraton Universal Hotel—which according to the list has the eighth largest ballroom in the Valley region—said there are more events but they are up to 25 to 30 percent smaller in size than they used to be. What’s more, guests are spending less on food and beverage than they did during the heyday of the economic boom five years ago. Meeting revenue as a result has been flat. “Everyone has downsized their meetings and a lot of it is short term,” he said. Where meeting planners used to book one two years ahead, today they are booking just six to nine months in advance. He said he expects larger events to return come 2014 and 2015 and some of those large bookings are already going on the calendar. Krouse said that while Downtown’s meeting business is admittedly much stronger, Valley operators can take comfort in the fact that Downtown business often spills into the Valley. Download the 2012 LARGEST MEETING FACILITIES list (pdf)