Battered hotels suffer further as travelers opt for friends.

When Liz Rajanayakam's parents travel from Houston to visit their 31-year-old daughter, they always stay in her one-bedroom West Hollywood apartment.

Rajanayakam, who has lived in Los Angeles for two and a half years, said it's never crossed her mind ask her parents to stay in one of the area's numerous hotels.

"Maybe it's a cultural thing," she said. "But I wouldn't ever think to ask them to stay in a hotel."

Rajanayakam is far from alone. Amid an ongoing decline in travel, a new study finds that the majority of L.A. leisure visitors are skipping hotels in favor of spare bedrooms and couches.

According to a report prepared by LA Inc., the convention and visitors bureau, only 46 percent of area tourists stayed in a hotel or motel during their stay last year--the balance choosing to stay with friends and family. That's down front 52 percent in 2000.

In 2002, the number of leisure travelers who stayed with friends and family climbed by 850,000, nearly a 10 percent jump from 2000.

LA Inc.'s report, released as part of an annual tourism presentation to general managers of Los Angeles hotels, is based on data from a national survey of travel agents and tourists conducted earlier this year by the Travel Industry Association of America.

While the results were bad news for hotels, the report found that average spending by non-hotel tourists increased 20 percent, to $2.5 billion, from 2000.

Comparatively, the number of leisure travelers staying in hotels increased by 5 percent but their spending has decreased by 15.4 percent, or more than $1 billion, in the same period.

In certain areas of L.A. County, there have been signs of improvement. For the first six months of the year, hotel occupancy in Los Angeles County increased 1.1 percent, to 67.5 percent, from the previous six months, according to PKF Consulting, which tracks hotel trends. But Los Angeles County hotel room rates have continued to decline by 3.4 percent, to $115.36.

"Even with the deals they can get at hotels, research shows it's still not a compelling enough reason to stay in a hotel versus staying with friends and relatives," said David W. Sheatsley, vice president of LA Inc.'s research and business development department.

Neale Redington, national partner-in-charge of Deloitte & Touche's hospitality division, said that despite declining rates, the L.A. market remained relatively healthier than places like San Francisco, where rates are off by 40 percent from two years ago.

Other studies have shown that since the Sept. 11 terrorist attacks, tourists are increasingly staying with friends and family, not just out of financial necessity but also because of a renewed desire to be close to their loved ones, Sheatsley said.

"This shows it's not just about the savings, but connecting with friends and relatives." he said. "This is one of those really interesting changes that has taken place locally in response to world events."

Cashing in

Some retailers have begun trying to take advantage of the shifting travel trend. Merchants at the Beverly Center, for example, have special offers for residents when they bring in out-of-town guests.

"This has been an increasing trend in the travel industry," said Shoshana Puccia, the mall's tourism marketing manager. "The trend in travel is to stay closer to home and when they do travel, they stay with friends and family."

She said many of the mall's tenants, including restaurants, have told her they've noticed increased spending by tourists coming in for the discounts. Puccia said the mall tracks tourist spending, but does not release figures.

"It makes-sense if you think about it," she said. "With five nights worth of hotel money in their pocket, they are going to spend a bit more on other things."

Meanwhile, Rajanayakam said numerous friends and family members are making plans to stay with her when they come to Los Angeles. "I think they would be highly offended if I suggested they stay at a hotel," she said of her parents.