More Visitors a Welcome Sign

By Ed Moosbrugger

July 3 -- Forget about May gray and June gloom. Prospects look bright for the Santa Monica visitor industry during the peak summer tourist season.

Downtown Santa Monica hotels report that business has been strong so far this year and they expect a good vacation season.

“Summer looks very good,” said Dino Nanni, general manager of Hotel Shangri-La. “Bookings are pretty solid through summer.”

At the Best Western Ocean View Hotel, General Manager Robert Farzam thinks summer business will exceed his earlier expectations.

“I think it’s just the economy as a whole,” he said. “I’m expecting more tourists this summer.”

Group bookings look solid, and Santa Monica gets a lot of individual repeat business, so the local visitor industry should remain strong as the economy expands and if consumer confidence doesn’t falter, said Misti Kerns, president/CEO of the Santa Monica Convention & Visitors Bureau.

Although local hotels expect a solid summer, there are some caution signs. The Travel Industry Association of America estimates that domestic travel will grow less than 1 percent this summer. TIA expects travel to pick up as the summer progresses and travelers get used to high gasoline prices.

In a bit of good news for Santa Monica, TIA expects international travel to the United States to continue to rise as the value of the dollar declines and airlines pursue the foreign market vigorously. Santa Monica’s visitor industry relies heavily on international travelers.

On another positive note, going to the beach or lake ranked second in expected activities by domestic travelers this summer, according to TIA. That, of course, plays into one of Santa Monica’s biggest assets.

Santa Monica hotels have done well so far this year. For the first four months of 2006, the occupancy rate rose 3.8 percent to 82.23 percent and the average daily room rate increased 8.1 percent to $247.90, according to a report by PKF Consulting.

Santa Monica is near the top in Los Angeles County in both occupancy rate and average daily room rate, according to PKF’s report.

“Business has been very good,” Desmond Acheson, general manager of the Fairmont Miramar Hotel, said in early June, with both occupancy and room rates increasing. Occupancy was up about eight percentage points from a year ago.

Through May, occupancy at the hotel was 80 percent and the average room rate was just shy of $300. Acheson expects an occupancy percentage in the high 70s to low 80s and some increase in room rates in the third quarter.

The Fairmont Miramar has benefited from increased business travel, with companies sending more people to meetings, he said.

Business is up this year and May was especially strong, Best Western’s Farzam reported.

The trend is encouraging, Kerns said.

“We are above projections,” she said. “This does not necessarily mean there are more visitors individually visiting us, but that many are extending their stay and spending more.”

Kerns believes pent-up demand is driving the market, and she doesn’t expect high gasoline prices to have a major impact on the local visitor industry because the visitors bureau doesn’t push the drive market into Santa Monica. Some local hotels said they haven’t noticed any impact from gas prices.

Santa Monica continues to benefit from international markets.
Kerns reported that Santa Monica is “staying steady with our international visitors from the United Kingdom, Australia and New Zealand. More Japanese are visiting as well. The Asian market is expected to rebound in the next two years.”

Business at Santa Monica hotels shifts a bit during the summer, with more leisure travel.

At the Miramar it’s more of a local market during the summer, with a lot of visitors from California and Arizona.

“We get more leisure travel,” Shangri-La’s Nanni said. “That’s why July and August are our biggest months.” The summer leisure travelers ugment the business and foreign visitors, he noted.

Kerns made it clear that while Santa Monica’s visitor industry is strong, the city can’t just sit back and expect good times to continue.

“In order for our community to sustain and grow the healthy tourism revenues, we must invest in providing the best overall experience possible,’ she said.

One key element is “ensuring we all offer friendly and knowledgeable employees across the board,” Kerns said. The bureau plans customer service and diversity training programs to help in this effort.
Meanwhile, she said, “thank your customers and ask them to please come back again.”