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Local Tourism Industry Inching Back Into Recovery

Tourism is slowly starting to make a comeback in the region and the state, but travelers are still cautious about how they spending their money and much rides on improvement in the general economy, economists say. The California’s hotel industry took a major hit in 2009, with statewide room revenues dropping by 18.8 percent, compared to a 0.1-percent drop the year before, according to the Los Angeles County Economic Development Corporation’s 2010 Mid-Year Economic Forecast. However, the industry has seen recovery in 2010 with a 1.6-percent year-to-date increase in room revenues with growth expected to continue, according to the report that was released in July. By April of this year, average room occupancy rates also grew by 4.8 percent statewide, though travelers were still bargain-conscious, keeping room rates at a 4.6-percent decline. Of all counties in the state, Los Angeles County made the second-highest level of progress for increasing room revenues, with a 5.5-percent increase in year-to-date revenues. The growth was driven by higher occupancy levels and new room capacity, the report said. Tourism industry revenues are expected to turn up for the remainder of 2010, with business travel picking up and California destinations attracting more leisure travel. “In the case of business travel, all during 2009, most business firms made an effort to just cut costs to the bone, and that meant no travel unless absolutely necessary,” said Nancy D. Sidhu, chief economist for the economic research organization. “This year, those rules aren’t quite so strict, so there’s been more travel going on.” More traffic In the San Fernando Valley, occupancy rates through June this year showed signs of improvement, with rates at 66.7 percent compared to 61.9 percent during the same period last year, according to data from LA Inc., or the Los Angeles Convention and Visitors Bureau. However, there was a decrease in room rates at Valley hotels, with average rates being set at $101.12 through June this year compared to $103.97 during the same period last year. “The situation is that the Valley hotels are trending ahead of last year in occupancy year-over-year,” said Carol Martinez, spokeswoman for the bureau. “The Valley is doing better this year than they did before. “We know that Universal Studios Hollywood has been busy, and a lot of tourists are traveling to Los Angeles to experience the new (King Kong) attraction, and that would contribute to room nights in the Valley,” she added. But even with local and statewide improvements, Sidhu said continued progress is not guaranteed, and much of the future of the industry depends on the overall economy and employment rates. “We should expect to see (improvement) as long as the economic recovery is in tact,” she said, adding that economists are hopeful employment levels will increase by the end of the year. “I expect to see continued upturns in tourism and travel patterns generally. … More people travel when more people get comfortable about their economic situation.” She added that hotels should expect ups and downs, even in the case of recovery. “Recoveries don’t happen in a straight line,” she said. “So we should expect that there will be better months and not-so-good months.” Hotels hopeful Many local hotels have already started seeing signs of recovery. “We’re seeing that our booking space and our catering for the future has improved,” said Bert Seneca, general manager at The Beverly Garland Holiday Inn. “The rooms are rebounding, but the banquet side is still lagging.” Seneca, who is also the chairman of the San Fernando Valley Conference and Visitors Bureau, said bookings for corporate events are usually slower to recover. That’s because special events occurring now are those that were booked months back when companies were harder hit by the poor economy, he said. The Warner Center Marriott has also seen increases in business. “It started at the beginning of the year,” said Clay Andrews, the hotel’s general manager. “We’ve definitely seen the business traveler come back. … (And) now we’re seeing catering come back, which is really nice.” Holiday party bookings at the hotel, which had dropped by more than 50 percent during the recession, are also seeing improvement, he added.

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