Lodging Rates, Occupancy Expected to Rise

With an economic recovery humming along and corporate travel budgets growing fatter, finding a bargain hotel rate in the Southland may be as hard as getting elbow room on a flight nowadays.

A recent survey showed that hotel occupancy rates in Orange and Los Angeles counties are expected to increase 1.4% this year, tying them for fourth place among cities with the largest increases.

“Things will be more crowded there,” said Karen Goodwin, editor of Frequent Flyer magazine, which published the survey in its January edition. That could be a boon for restaurants, rental car companies and others that feed off the tourism trade. “If you had an easy time booking there in the past, it will get harder.”

Demand for lodging in Orange County is at its strongest point since the early 1990s, said Ranette Maurer, sales manager at the Wyndham Garden Hotel in Costa Mesa. She said the hotel is sold out two weeks ahead of time Tuesday through Thursday, prime business travel days. Room rates also have gone up $30 in the last year to about $109.

Across the country, average room rates are expected to climb to $112 this year from $106 in 1997. That means prices certainly will rise here too, but not as quickly as in some other markets, such as New York City, where it has become considerably harder to book rooms.

The average daily room rate in Orange County is $94.81, up 11% from $85.61 a year ago. Even though rates have risen as the recovery has taken hold in Southern California, they still trail the national average and other regional destinations, such as San Francisco and New England, said Bruce Baltin, an analyst at PKF Consulting, a Los Angeles firm that studies the lodging industry.

Business travelers to Orange County may have to make arrangements further in advance. But prices have not yet forced planners to find cheaper lodging elsewhere or to alter their arrangements. “At some point, companies will stay further away from their destinations or cut back their trips or shorten their trips,” Baltin said, referring to future price increases. “But not yet.”