Hotel reservations in Los Angeles have returned to 100% of their pre-pandemic levels in October and November 2019, well above the national average, as many hoteliers scrambled to maintain their standards amid staffing challenges and supply chain issues.
A milestone in Los Angeles’ comeback was reported by international hotel trade platform SiteMinder, which is used by thousands of hotels to sell rooms online.
And while Los Angeles hoteliers do a better job than most, the itch of traveling locally and possibly visiting friends and family is so widespread as people shrug off the pandemic.
“There is pent-up demand for vacations that are being pushed back, for weddings that have been canceled,” said hotel sales broker Jon Strauss of JLL, and the threat of novel coronavirus variables has not stopped the renewed rush to move across the country.
“Despite the strong Omicron winds, there is a definite and strong appetite” for travel, he said.
Most hotel guests go to the road for pleasure rather than work. The reopening of family attractions like Disneyland, Universal Studios Hollywood and SeaWorld has prompted many Americans to drive or travel to Southern California, Strauss said. These are “big drivers” of tourism.
Many visitors to Los Angeles come from elsewhere in California, which isn’t surprising because so many travelers choose destinations they can get to by car, said Bernard Palin, regional vice president for the Americas at SiteMinder. Arizona, Nevada, Texas and New York were among the other states that sent the highest percentage of hotel guests to Los Angeles.
The national average for hotel bookings is 89.57% of 2019 numbers, according to SiteMinder. The data shows that San Francisco hotels, in contrast, are operating at about 50% of pre-pandemic levels.
International travel remains more difficult than usual with pandemic fears and months of restrictions, including quarantines, meaning fewer visitors are coming to Los Angeles from abroad than has been common in past years.
In the past six months, more than 15% of Los Angeles visitors have been international guests, Palin said, with the majority of bookings coming from Mexico, Argentina, Britain, Belgium and Spain.
Rob Lowe, whose company recently opened a full-service hotel called Tea at the Ivy Station complex in Culver City, said hoteliers are taking advantage of the pandemic-related shift among US employers to allow their employees to work remotely instead of in the office.
“People are more flexible,” he said, working remotely. “If they don’t have to be in the office on Fridays or Mondays, they can extend their stay at the end of the week and work from the hotel.”
Lowe is the co-CEO of a Los Angeles real estate company called Lowe, which owns and operates hotels and other commercial properties in the US among its Terranea resort lodges on the coast in Rancho Palos Verdes.
The Shay opened in October, and occupancy is already averaging around 50%, Lowe said, serving leisure travelers on the weekends and a mix of leisure and business guests during the week.
The resurgence of hotel stays has been above-average leisure travel, but bookings for group events are increasing after all but disappearing during most of the pandemic. Leisure travelers, people traveling for business reasons, and groups that gather for retreats and other common interests such as weddings are the three main categories of hotel guests.
Lowe said California’s COVID-related restrictions on indoor gatherings hampered group business in the state in the first half of the year. Collective acts began to return in the summer and accelerated in August. In September, the increased number of infections from the Delta variant led to a series of cancellations.
Lowe said the calm did not last long. “The cancellations magically ended after September, and the following months were ‘very strong,'” he said.
Nationally, Strauss said, “there is a significant resurgence of pent-up teamwork” as people who have delayed meetings and meetings put it back on the calendar. Top destinations are large resort hotels and properties close to entertainment venues such as theme parks.
The pace of growth points to “very strong” group bookings in 2022 and 2023, he said, and the US Travel Assn. It expects spending on domestic business travel to increase by more than 50% next year.
Business travel is starting to pick up, Strauss said, but it has not re-emerged as a priority for businesses in the era of Zoom and other online meeting services.
Concerns about Omicron and other changes in the coronavirus remain a factor in people’s travel planning, however Strauss predicts that international travel will be the next category to increase as quarantine requirements and other restrictions begin to rise.
Last month, the United States fully reopened its borders with Mexico and Canada and lifted travel restrictions that covered most of Europe. The restrictions were among the most severe in US history and frustrated many potential visitors from abroad.
Among the luxury Los Angeles hotels a short drive away is Rosewood Miramar Beach, a seaside resort in Tony Montecito, where rooms typically rent for more than $2,000 a night, even in winter. Jackie Levy of Caruso in Los Angeles, which owns the property, said the hotel closed for about two months early in the pandemic in 2020, but it’s been pretty busy since then.
Levy declined to discuss Miramar’s occupancy and revenue, but said Thanksgiving week has run out, and that his business at events like weddings has been booming for the past six months.
“We have two or three events every week through December and into next year,” said Levy, chief revenue and business officer for the company founded by developer Rick Caruso. Most are weekend weddings, which start at $29,000, but midweek work retreats are also starting to pop up again.
Celebrity interest has increased the profile of Miramar, an old family beach getaway that Caruso took over and rebuilt in 2019. In October, drummer Travis Parker of pop-punk band Blink-182 proposed to reality TV star Kourtney Kardashian in a promoted ad. Widely. A moment at the hotel beach.
For more typical travelers, the preferred destination is a brand that is generally familiar. Nearly one in four Americans say that a large chain or resort is where they will be staying on their next trip, Palin said. Despite this, the popularity of boutique and luxury hotels, the preferred types of accommodation for 26% of travelers, grew slightly up from before the pandemic.
As guests return, many hotels are struggling to get the routine supplies they need to operate.
Nearly 3 in 4 operators say supply chain issues are hurting their revenue, according to a recent survey by American Hotel & Lodging Assn. They experience delays or increased costs in getting essentials such as cleaning supplies, linens, and food and beverages.
Lowe said his company has major problems with the supply chain when it comes to building and renovating hotels. Bathroom vanities, for example, were pre-built in Asia and delayed at sea.
“Same with furniture,” he said. “It comes in bits and pieces over months rather than over time.”
Lowe said a persistent challenge for hoteliers that may last longer than supply chain problems is staff shortages, particularly in dining areas and bars, reflecting a nationwide shortage of food service workers willing to work for the wages the industry typically pays.
“Most hotels and restaurants have fewer servers than they need and have strong demand,” Lowe said. Labor-saving measures implemented during the pandemic, such as placing menus on QR codes and ordering recipients for electronic devices, may be here to stay, especially in informal settings.
“We see it as a permanent change because we are definitely understaffed, and we don’t see that changing,” Lowe said.